KUALA LUMPUR (May 17): PPB Group Bhd (KL:PPB) is planning to invest RM327 million in its film exhibition and distribution segment, which houses Golden Screen Cinemas, over the next five years.

The company plans to open seven new cinemas over the next three to five years — one in Terengganu, one in Sarawak, two in Penang and three in the Klang Valley region, said Golden Screen Cinemas Sdn Bhd (GSC) chief executive Koh Mei Lee. GSC is wholly owned by PPB.

"Nowadays, we have a lot more competition from other platforms, so we are now creating future-ready lifestyle cinema entertainment like Aurum TRX,” she told The Edge after the PPB’s annual general meeting. “We are diversifying from just movies into F&B (food and beverage) and events.”

GSC has previously stated that the company aims to increase its market share in key locations and consolidate selected locations that are non-performing or older cinemas.

GSC has closed two cinemas last year and another three so far this year. The company is set to close its fourth cinema in Sungai Petani, Kedah by June.

The company, however, has also opened five outlets over 2023 and another two year-to-date. 

“We are positioning ourselves to be able to capitalise on the growth in terms of revenue and profit when the market recovers,” Koh said. “We do expect that the market will recover when we get more Hollywood content, which is expected in 2025 and 2026.”

GSC will gear up its investment in local and regional film co-production over the next five years to reduce its reliance on Hollywood content, as the writers’ and actors’ strike in Hollywood resulted in the deferment of key blockbuster titles, according to Koh.

For FY2023, GSC reported a loss before tax of RM120.4 million, compared to a loss before tax of RM17.08 million for FY2022, due to asset impairments and higher cinema operating costs.

Meanwhile, PPB managing director Lim Soon Huat said the group remains cautious about consumer sentiment, despite the government’s recent announcement of the Employee Provident Fund’s (EPF) Flexible Account and salary increments for civil servants.

“It all depends on how the EPF withdrawals will be used,” Lim said. The withdrawals, he continued, “will help the B40 and M40, but consumer sentiment remains cautious, particularly with higher cost of living”.

PPB is expected to announce its financial results for the first quarter ended on March 31, 2024, next week.

For the financial year ended Dec 31, 2023 (FY2023), PPB's net profit stood at RM1.39 billion, falling by 36.53% from RM2.2 billion in FY2022, while revenue also dropped 7% to RM5.72 billion from RM6.15 billion a year ago. The decline was mainly due to lower contribution from Wilmar International Ltd.

At Friday’s noon break, shares of PPB were up two sen or 0.13% to RM15.50, valuing the group at RM22.05 billion. Year-to-date, the counter has climbed RM1.22 or 8.5%.