Russia's largest film networks suffered "billions" in losses in 2022 due to the withdrawal of Hollywood studios

Russian film distribution networks suffered record losses last year. Cinema Park, the main legal entity of the combined Formula Kino and Cinema Park chains (managing 65 cinemas), lost 43.2% of its revenue. In 2022, the legal entity's net loss amounted to RUB 1.8 billion, compared to RUB 861.8 million in net profit a year earlier.

Source. RBC studied the public financial statements of the largest Russian cinemas.

RSM LLC, the legal entity of the chain that operates 12 cinemas, saw its revenue fall by 47.3% to RUB 1.1 billion. The net loss amounted to 482.4 million rubles against 37 million rubles of profit in 2021.

Revenue of Karo Film Management LLC, which manages most of the Karo cinemas, decreased by 41.8% to RUB 2.2 billion. The net loss amounted to RUB 1.3 billion, compared to RUB 9.4 million a year earlier.

Revenue at Kinomax, the legal entity that manages the Kinomax chain, fell by 46.6% to about RUB 2 billion.

The company that manages the Cinema Star chain also reported a 44.2% drop in revenue.

Alexei Vasyasin, head of the combined Formula Kino and Cinema Park chains, called 2022 a "catastrophic" year for Russian film distribution: he expects 2023 to be "slightly better."

Vasyasin noted that despite public statements by some officials about supporting the industry, no concrete decisions have been made:

"Neither the issue of compulsory licensing nor the issue of subsidies has been resolved to survive until 2024-2025, when Russian producers will make their films."

The industry has been crippled, in particular, by the withdrawal of Hollywood studios from Russia: in 2021, foreign films accounted for almost 75% of the 40.7 billion rubles in box office receipts, RBC points out.

The box office began to stabilize only by the end of 2022, and in the first week of 2023, cinema attendance increased amid the success of one movie, Cheburashka.