Ster-Kinekor is arguably SA’s largest cinema chain, but even it has been hit hard by the Covid-19 pandemic. Until February 2020, Ster-Kinekor “was profitable and highly cash generative, with good prospects of future, ongoing profitability,” at least according to a statement released by the company.
However, it took less than a year for the chain to officially go into business rescue. All Ster-Kinekor cinemas will remain open despite this new development, as the company looks to find measures to aid the business.
The board of directors of Ster-Kinekor Theatres Proprietary Limited announced that the company had officially entered voluntary business rescue, effective as of the 27th of January 2021.
“Up until February 2020, Ster-Kinekor welcomed millions of moviegoers every year to their cinemas. The business was profitable and highly cash generative, with good prospects of future/ongoing profitability from the pipeline of blockbuster film content that had been scheduled,” read a statement issued on behalf of Stefan Smyth, the business rescue practitioner in charge of the chain.
So why did Ster-Kinekor have to enter business rescue? According to the above statement, Ster-Kinekor was a thriving business up until February 2020 – right before the first Covid-19 cases showed up in South Africa.
The South African government implemented a hard lockdown as a result of the pandemic at the end of March 2020, during which only essential businesses were allowed to remain open. As a result, Ster-Kinekor was only able to reopen in August 2020 – five months after it had to shut its doors initially.
South Africa has experienced the highest number of Covid-19 cases on the African continent – with cases surpassing 1,000,000 to date. The country implemented one of the strictest lockdowns in the world in March 2020, banning all non-essentials businesses from operating, implementing a strict curfew, stay-at-home order for all civilians, and a ban on tobacco and alcohol products. South Africa has been hit hard by an economic recession as a result.