Reading International (RDI) Conference Transcript

Summary of Reading International (RDI) Conference Call - May 22, 2025 Company Overview - Company Name: Reading International (RDI) - Ticker Symbols: RDI (voting stock), RDIV (non-voting stock) [2] - Business Model: Operates in two primary sectors: cinema and real estate, across three countries: the US, Australia, and New Zealand [4][5] Industry Context - Cinema Business: The cinema sector has historically funded real estate acquisitions and expansions, contributing to shareholder value [5] - Real Estate Business: The company holds numerous real estate assets, particularly in New York City and Philadelphia, which are part of its legacy from the Reading Railroad [5][8] Financial Performance - Debt Reduction: Successfully reduced debt from $276 million to$173 million since June 2020, despite challenges posed by COVID-19 [16] - Revenue Trends: The first quarter of 2025 showed a mixed performance, but overall revenue trends are positive, with a focus on maintaining a 50/50 revenue split between cinema and real estate [14][19] Challenges Faced - COVID-19 Impact: The pandemic severely affected operations, leading to a lack of US government support, unlike subsidiaries in Australia and New Zealand that received grants [10][11] - Supply Chain Disruptions: Ongoing issues with the Screen Actors Guild strikes and tariffs affecting the ability to distribute films [9] - Economic Environment: Operating in a high-interest-rate environment and facing a downturn in commercial office real estate [9] Strategic Initiatives - Asset Sales: Focus on selling non-income producing assets to maintain liquidity, including the recent sale of Cannon Park for AUD 32 million [22] - Real Estate Development: Plans to complete leasing of key properties, such as Union Square in New York City, and evaluate the potential of the Reading Viaduct and Philadelphia properties [20][32] - Cinema Expansion: Aiming to enhance cinema offerings with premium screens and improved food and beverage services [42][44] Market Position - Exhibitor Rankings: RDI is the 13th largest exhibitor in the US, 4th in Australia, and 3rd in New Zealand [5][7] - Niche Market: The Angelica Film Center is a leader in the specialty arts cinema market in the US, while the Consolidated brand is the largest in Hawaii [37][46] Future Outlook - Box Office Recovery: Anticipated rebound in box office performance, supported by upcoming film releases and a strong management team [45][46] - Diversification: The company remains diversified across three stable economies, with approximately 50% of revenues generated from Australia and New Zealand [47] Key Metrics - Occupancy Rates: Australia and New Zealand properties maintain a 98% occupancy rate among third-party tenants [28] - Food and Beverage Performance: Significant growth in spend per head across all geographies, with plans to enhance offerings [43] Conclusion - Investment Proposition: RDI is well-positioned to capitalize on the anticipated recovery in the cinema industry, supported by a strong real estate portfolio and effective management strategies [45][47]