Cineplex hopes for brighter summer blockbuster season as it reports quarterly loss

·4 min read

TORONTO — The unofficial start of Hollywood's summer blockbuster movie season is fast approaching later this month, and while few Canadian movie theatres are open, the head of Cineplex Inc. is optimistic a return to business is in sight.

Chief executive Ellis Jacob said Thursday he anticipates that COVID-19 restrictions will ease up in most provinces before late next month, ahead of the release of "Fast & Furious 9" on June 25.

"I don't know what the restrictions are going to be ... but I feel by the time we get there, we'll have the majority of our theatres open and ready to move forward," he explained after Cineplex reported another quarterly loss.

It's an educated guess on Jacob's part, but lately, the film industry has been full of them.

In the United States, theatre owners are watching box-office results pour in every week hoping to glean insight on signs of sustainable life in their business, while film studios are offering mixed confidence in the future of film exhibition.

On Thursday, Sony announced that "Cinderella," starring Camila Cabello, had been pulled from a July theatrical release and sold to Amazon for a streaming debut.

Meanwhile, Disney and Warner Bros. are sticking to a simultaneous theatrical and premium video-on-demand rollout in Canada, giving moviegoers the option to stay home.

At the same time, studios are pushing out a blend of big-budget holdovers from 2020 and low-risk horror films in theatres, starting with a sequel to breakout thriller "A Quiet Place" on May 28.

That's left Cineplex and its fellow Canadian exhibitors in a tough spot as they watch receipts roll in south of the border, while cinemas here remain shuttered.

"A Quiet Place 2" won't be opening in Canada with much fanfare, and it's still uncertain whether the latest film in "The Conjuring" series or "Peter Rabbit 2," both due a couple of weeks later, will have much of presence on Canadian screens either.

"I'm not happy we have 27 theatres open — next week we'll have 30 theatres open — but I'm being optimistic," Jacob said.

"Vaccines are rolling out much quicker than in the past."

At this point, any locations reopened will mark an improvement over the first-quarter results, reported on Thursday.

Cineplex said attendance plunged 96 per cent in the period, with a total of 415,000 patrons buying tickets, compared to the same three months that ended March 31 last year as the virus was spreading across the world.

The company reported a loss of $89.7 million, compared to a loss of $178.4 million in the prior year when it took $173.1 million in non-cash impairment charges at the start of the pandemic.

The losses amounted to $1.42 per diluted share versus $2.82 per diluted share a year ago.

Revenue totalled $41.4 million, down from $282.8 million in the first three months of 2020.

Cineplex has spent much of the pandemic tightening its costs, though as of the first quarter it was still burning through an average of $26.9 million each month.

The company struck a number of agreements to counter expenses, including one with lenders to further amend its credit agreement, and another for the sale of its Toronto headquarters in a leaseback worth $57 million. Half of the proceeds went towards paying back debt, it said.

More recently, Cineplex shed ownership and distribution rights for its digital and in-theatre publication Cineplex Magazine to Torstar for an undisclosed amount.

The move transferred operating costs of the magazine business to the newspaper publisher and, Jacob said, gave Cineplex the benefits of advertising in Torstar newspapers, distributing the magazine as an insert and potentially further content partnerships in the future.

Jacob told investors in a conference call that the company's actions will "provide the runway we need to see us swim to the other side of this, and the other side is close, we can all see the light at the end of the tunnel now."

This report by The Canadian Press was first published May 6, 2021.

Companies in this story: (TSX:CGX)

David Friend, The Canadian Press

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