Cineplex Inc. reported a loss in its most recent quarter compared with a profit a year ago as theatre attendance fell, but CEO Ellis Jacob says the end of the second quarter was a turning point. A Cineplex Odeon Cinemas is shown in Oshawa on Friday January 21, 2022. THE CANADIAN PRESS/Doug Ives
TORONTO – Cineplex Inc. continued to feel the impacts of twin Hollywood strikes in its second quarter, but the end of the period marked a turning point.
Ellis Jacob, the Toronto-based cinema chain’s chief executive, said Friday that the box office picked up in June and July as “Inside Out 2,” “Deadpool & Wolverine,” “Twisters,” and “Despicable Me 4” hit theatres.
But the lead up to the summer blockbusters was hampered by a depleted film slate – the fallout of the months-long job action by the Writers Guild of America and Screen Actors Guild-American Federation of Television and Radio Artists’. The strikes pushed back the release of much-anticipated movies including “Avatar 3″ and Dune: Part Two”
The writers’ strike wrapped in September and the actors left picket lines in November.
“Having been in this industry for over 35 years, I’ve seen the ebbs and flows of the film slate, but what always rings true is when compelling content is there, moviegoers head to their local theatre to escape and immerse themselves in films of all genres,” Jacob told a conference call with financial analysts.
Cineplex said Friday that it lost $21.4 million or 33 cents per diluted share for the quarter spanning April 1 to June 30. That second-quarter result compared with a profit of $176.5 million or $1.99 per diluted share a year earlier.
Revenue for the quarter totalled $277.3 million, down from $367.9 million in the same quarter last year, as theatre attendance amounted to 8.7 million people for the quarter, down from 12.8 million a year ago.
The performance mirrored results of other global theatre chains like AMC Entertainment, which similarly reported a loss and revenue drop in its most recent quarter.
“We all felt the extended impact of the Hollywood strikes in the first half of 2024,” Jacob said, conceding that the industry always felt the business would have a “slow start” to the quarter.
But he also detected “a pivotal change” during the quarter, when more big film releases made their way to cinemas and Cineplex pushed a roster of event programming including the Metropolitan Opera’s Madama Butterfly and the Twenty20 International cricket tournament.
Madama Butterfly was the strongest opera title Cineplex has seen since 2019 and the India-Pakistan cricket match was the most attended sporting event it has hosted since 2016, Jacob said.
By the time July ended, Jacob estimated Cineplex entertained 5.5 million guests – its highest monthly attendance of the year.
Though overall attendance was down in the second quarter, those who visited the movies spent more. Cineplex’s box office revenue per patron was $13.11 in the quarter, up from $12.84 a year ago, while concession revenue per person was $9.56, up from $9.21 in the same quarter last year.
The increases stand in contrast to several retailers which have watched consumer spending fall as Canadians continue to grapple with high interest, inflation and mortgage rates.
During seven of the last nine recessionary periods, Cineplex’s chief financial officer has seen the box office rise.
“(Customers) are looking to indulge and downsize their out of home entertainment experiences from things like concerts and professional sporting events to movie going,” Gord Nelson said.
Cineplex is preparing to meet the demands of these downsizers by opening two Rec Room arcade and dining venues in Montreal and Vancouver and a Playdium in Toronto adjacent to its Fairview Mall location.
A new theatre will also open at Montreal’s Royalmount shopping complex in Montreal. All of the venues are expected to open in the fourth quarter of 2024.
By the time the year ends, “Beetlejuice Beetlejuice,” “Wicked,” “Moana 2,” “Mufasa: The Lion King,” and “Joker 2” will all have hit theatres.
Next year, will also bring sequels to the Jurassic World, Mission Impossible, Captain America, Avatar and Wicked franchises, and Jacob feels the slate beyond 2025 looks even brighter.
“The pipeline of blockbusters over the next several years is truly remarkable,” he said.
This report by The Canadian Press was first published Aug. 9, 2024.
Companies in this story: (TSX:CGX)
