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TORONTO – Canada’s largest theater saw 91% fewer admissions over the summer than last year, prompting the company to launch new offerings for movie lovers.
Cineplex Inc. said Friday that only 1.6 million people viewed the movies during the third quarter, down from 17.5 million in the third quarter of 2019.
To attract viewers again, the company will heavily market affordable private theater rentals ahead of the holiday season. It will also cut new projects and seek to further reduce real estate and personnel costs with the sale of its Toronto office and the federal government’s wage subsidy program.
“We have done everything we can to make sure we can make it, and we strongly believe in the ability of the exhibition industry to bounce back,” Ellis Jacob, president and chief executive of Cineplex, told The Canadian Press.
Previously, Cineplex had reported a net loss of $ 121.2 million or $ 1.91 per share, down from the profit of $ 13.4 million or 21 cents per share reported last year at the same time.
The chain’s revenue was $ 61 million in the three months ended September 30, down from $ 418.4 million in the same period in 2019.
Analysts had expected Cineplex to lose $ 57.3 million or $ 1.31 per share, according to financial data firm Refinitiv.
The company quickly sought to reverse those findings, which were triggered by the drop in audiences during the temporary shutdown of theaters ordered by public health officials in COVID-19 hotspots.
Cineplex’s efforts to cope with the pandemic changes included raising an additional $ 303 million in credit, substantially reducing net lease outflows by approximately $ 58 million, and pursuing the sale of its headquarters with the potential for a transaction. of relegation.
“We have completed a thorough analysis of our rights under our leases and where we thought we had attractive rights, we contacted the owners to monetize some of those rights,” Chief Financial Officer Gord Nelson told analysts in a statement. Friday phone call.
Cineplex also temporarily laid off staff, slashed salaries, and used $ 22.5 million from the government wage subsidy plan to cut personnel expenses to $ 3.9 million during the quarter, up from $ 40.9 million. dollars in the same period last year.
On Friday, it introduced private auditorium rentals starting at $ 125.
The initiative will allow up to 20 guests to enjoy a movie together as they get away and will include a choice of 1,000 films including the holiday hits “The Grinch” and “Love Actually”.
“We wanted to release it because it gives guests another chance and we did it so that you can get a movie at an affordable price, you can buy it online, which makes it a lot easier and you can enjoy social experience,” said Jacob. .
However, returning to 2019 revenue levels should still be difficult.
Cineplex is suing Cineworld, a UK-based theater operator that was supposed to buy Cineplex for $ 2.8 billion.
Cineworld ditched the deal on June 12, saying it learned of a material negative effect and violations by Cineplex, which vehemently denied the allegations.
Meanwhile, local health regulations have greatly reduced the number of viewers Cineplex can accommodate at a time, and the chain has had to pay for sanitizing the roses and the costs that come with physically distancing guests and protecting staff.
In maritime provinces, Alberta and British Columbia, Jacob said audiences returned to theaters faster than elsewhere and in some places where Remembrance Day was a holiday, Cineplex recorded a spike in attendance.
Those who took the visits saw few of the big hits originally planned for the year because studios and distributors pulled new releases and rescheduled for 2021, when they hope the virus will be more contained.
Christopher Nolan’s “Tenet” was one of the few new films that viewers were treated to. Cineplex screened the film before it was released to US audiences, a rarity in the world of cinema.
One of the latest major releases that has yet to be moved this year is the sequel to “Wonder Woman,” which Jacob said he spoke to Warner Bros.
Some believe the studio will push its release until next year. If they do, Cineplex has yet more films on the way like Toronto International Film Festival People’s Choice Award winner “Nomadland” and “News of the World” starring Tom Hanks.
“When I look to 2021, I think the holy crow, I’ll go to the movies every night,” Jacob said.
For those not wishing to visit a theater during the pandemic, Cineplex has long been offering home movie rentals and delivery of concession stand favorites like popcorn via Uber Eats or SkipTheDishes.
This report by The Canadian Press was first published on November 13, 2020.
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