Beta Media receives cash injection amid cinema industry's hefty losses
Beta Media receives cash injection amid cinema industry's hefty losses
Cineplexes startup Beta Media just received an investment of several million US dollar from Daiwa PI Partner, fueling the firm's ambitions to extend its network and create more Vietnam-made movies for local customers.
With its $8 million in extra funds, Beta Media wants to drastically scale its business
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Japan-based Daiwa PI Partners recently poured $8 million to Beta Media which operates 12 cineplexes and 60 movie houses across Vietnam. The investment is hoped to fuel the company's expansion plans under the franchise model as well as its ambitions to produce made-in-Vietnam movies under its production arm Beta Productions.
According to Bui Quang Minh, chairman of Beta Media’s management board, the firm targets to reach 50 cineplexes in the next two or three years. The initial step of the goal is to focus on Ho Chi Minh City’s nearby areas such as the two provinces Ba Ria-Vung Tau and Dong Nai.
Beta Cinemas was founded in 2014 in the northern province of Thai Nguyen. Along with the young and vibrant style the company wants to embody, after the first six years, the firm’s main competitive advantage remains the focus on low- and middle-income customers, which the company can afford by maintaining a stable profit as it is optimising land leasing costs via selecting suitable locations for its movie houses. This concept is contrary to the South Korean-backed CJ CGV Vietnam, which prefers shopping malls with the sometimes vast leasing expenses – one of the main reasons behind its tremendous losses during COVID-19.
In a response to VIR, Khanh Nguyen, lead of CJ CGV Vietnam’s PR corporate, said that its earnings in March plunged by 70 per cent on-year. Moreover, April and the first nine days of May saw no revenue at all. As soon as the national social distancing ended, just a tiny number of customers came to the cineplexes. “Currently, our performance has been improved but not as good as before the pandemic. However, it’s still positive for us at this time,” Khanh said.
Due to the huge deficit during the global health crisis, CJ CGV has just announced to sell its 25 per cent shares in CJ Vietnam to the other three subsidiaries of the parent company CJ Group.
CJ CGV’s financial performance has been greatly impacted due to unavoidable pandemic. Specifically, its debt-to-equity ratio rallied by nearly 200 percentage points to 845 per cent in this year’s first quarter, with an on-year drop of 22 per cent in total capital.
