March 1st, 2024

Cineplex posts Q4 loss despite theatre audience boost from Taylor Swift

By Tara Deschamps, The Canadian Press on February 8, 2024.

Cineplex Inc. reported a fourth-quarter loss $9 million compared with a profit of $10.2 million a year earlier as its revenue edged higher. A customer is served at a Cineplex theatre in Toronto on Wednesday, Aug. 26, 2020. THE CANADIAN PRESS/Christopher Katsarov

TORONTO – Taylor Swift delivered massive audiences to global movie theatres as 2023 wound down, but it wasn’t enough to keep Canada’s largest cinema chain from posting a loss in its most recent quarter.

Cineplex Inc. reported Thursday that it incurred a $9 million loss in its fourth quarter, which compared with a profit of $10.2 million a year earlier.

The quarter ended Dec. 31 spanned a usually busy period for movie watching as Academy Awards bait is typically debuted in the latter half of the year, but last year, the entertainment business faced several unique factors, including lengthy Hollywood strikes that threatened the movie release schedule.

A U.S. writers’ strike stretched from May to September, while actors in the country were off the job for nearly four months before approving a deal that would get them back to work.

When pop star Swift shocked the world in August, revealing plans to bring a theatrical movie of her hit concert The Eras tour to cinemas in October, it was welcome news for theatres – a view Cineplex chief executive Ellis Jacob still maintains.

He called 2024 “undeniably the year of Taylor Swift” on a Thursday call with analysts.

“Everybody was kind of worried about where our business was going and with the lack of content due to the strikes, (Swift’s film) was a great injection of an event that brought our guests out in a big way,” he later said in an interview.

Based on the box office, the film was Cineplex’s No. 1 movie in the fourth quarter and the industry’s biggest concert film of all time.

It contributed toCineplex’s fourth-quarter revenue ticking up to $315.1 million from $309.9 million in the last three months of 2022.

Box office revenue per patron was $12.90, down 1.2 per cent from $13.06 a year earlier, while concession revenue per patron was $9.28, up from $8.93 in the same quarter in 2022.

The increase in concession revenue per patron came as theatre attendance rose to 9.6 million compared with 9.2 million a year earlier.

Jacob believes audiences will continue to flock to theatres as Hollywood returns to its former pace of movie releases and films delayed because of the strike – “Challengers” with Zendaya and “Dune: Part Two” from Quebec’s Denis Villeneuve – see their release dates firmed up.

Cineplex will also show much-anticipated movies like “Beetlejuice Beetlejuice,” “The Lord of the Rings: The War of the Rohirrim,” “Despicable Me 4” and “Mufasa: The Lion King” later this year.

With several of those titles coming in the latter months of 2024, Jacob said “the fourth quarter at this point looks very strong compared to 2023.”

Cineplex ended 2023 screening “Renaissance: A Film by Beyoncé,” “Ferrari” “Wonka,” “The Iron Claw” and “Aquaman and the Lost Kingdom.”

“When we entered the quarter, I was quite nervous because I was counting on ‘Wonka’ and ‘Aquaman’ and there wasn’t a lot of depth, so I was a little worried, but I think we turned out ending the quarter in a reasonably strong fashion,” Jacob said.

In the weeks following the quarter’s end, Cineplex pulled South Indian film “Malaikottai Vaaliban” from theatres after four drive-by shootings at theatres throughout the Greater Toronto Area.

Cineplex’s dedication to international programming, which makes up 10 per cent of its annual box office revenues compared with four per cent at many of its counterparts, will not waver, Jacob said.

“We just have to look at where we play what we do and we are working very closely with the authorities,” Jacob said, noting that the most important thing is the safety of staff and moviegoers.

“Did it hurt us financially? Yes, but to me, it’s more important to be well aware of what is happening in our locations.”

The company’s next quarter will cover a refinancing plan it announced Thursday to improve its financial flexibility and reduce the dilutive impact of its convertible debentures.

A case against the Competition Bureau, which is alleging Cineplex used deceptive marketing to charge small fees on some tickets purchased online, will also crop up.

On the analyst call, Jacob called the allegations “unfounded” and said Cineplex will “vigorously defend” itself against class actions linked to the fee.

This report by The Canadian Press was first published Feb. 8, 2024.

Companies in this story: (TSX:CGX)

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