Coronavirus: Cineplex loses $98.9M in Q2 after movie theatres closed during pandemic


Cineplex Inc.’s chief executive is hoping that ending an agreement with a virtual reality golf company, films debuting in Canada before the U.S. and a slew of COVID-19 measures will right his business as it struggles with mounting costs for movie theatres that sat closed for months.

Ellis Jacob said Friday that his Toronto-based entertainment company had decided to mutually call off a deal with TopGolf that would have brought its sports complexes to Canada because it’s “simply not an opportune time” to invest in large projects.

Read more:
Cineplex opening 25 theatres across Ontario, allowing 50 people per screen

He was simultaneously rejoicing at studios allowing the country to debut new releases like “Spongebob: Sponge Out of Water,” “Unhinged” and Christopher Nolan’s “Tenet” ahead of the U.S., which he hoped would draw audiences back to the movies.

Story continues below advertisement

“This is a very unusual occurrence,” Jacob told The Canadian Press.

“Given what we have done in terms of keeping the guests safe during the pandemic, we got the international release dates and we are really proud of that.”

His remarks came as Cineplex reported a loss of $98.9 million or $1.56 per share in its second quarter, compared with a profit of $19.4 million or 31 cents per share in the same quarter last year.

Edmonton movie theatres re-open to the public with added safety measures

Edmonton movie theatres re-open to the public with added safety measures

Revenue for the quarter ended June 30 totalled $22 million, plummeting 90 per cent from $438.9 million, while its cash burn rate fluctuated between $15 million and $20 million every month.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

The company was hurt when it was forced by governments to keep its theatres closed for months during COVID-19, resulting in temporary layoffs, slashed salaries and tussles with landlords over rent.

Story continues below advertisement

Read more:
Cineplex layoffs impact more than 130 staff in Canada, U.S. amid coronavirus pandemic

Jacob warned analysts on a call Friday morning that the company would take more “bold action” if necessary, but for now, he is focused on welcoming guests to theatres.

To get them back, Cineplex is offering cheaper movie tickets, reserved and distanced seating, increased cleanings and screenings of NHL and NBA games.

Read more:
Here’s what Ottawa moviegoers can expect as theatres reopen this weekend

Jacob said the plan is already working.

“It is clear that Canadians miss the big screen and want to come back,” he said, noting that he was planning to head to the movies tonight.

The slate was far from the highly anticipated films, including “Black Widow,” “Mulan” and sequels from “Star Wars” and ”Avatar” that were once planned for this summer, but were pushed back amid COVID-19.

“Mulan”-backer Disney has since decided to skip a theatre debut and bring the movie straight to its streaming platform with a premium price of about $30 for viewing.

Read more:
Cineplex urges Ontario government to make changes to theatre occupancy limits

Story continues below advertisement

Jacob, who has long argued that movie watchers prefer the experience of visiting a theatre to watching at home, said he was “disappointed.”

“Disney has been very committed to the theatrical window, but this is a situation where they don’t have enough markets where they feel it would be impactful for them,” he said.

“From talking to them, they say this is more of a one-off and not something they would like to do once this is behind.”

Jacob argued most studios still value the theatre experience and though they’ve shifted in some cases to streaming, he wasn’t worried that switch would stick around forever or hurt his business.

Read more:
Cineplex sues Cineworld for damages in wake of failed $2.18B acquisition

He’ll keep an eye on that situation and on managing the fallout from Cineworld Group PLC walking away on June 12 from a $2.8 billion deal to buy the company.

Cineplex has filed a lawsuit against its former suitor over the failed deal.

The matter is set to make it to trial in September 2021, but could be delayed further, Jacob said.

© 2020 The Canadian Press


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *