- Cineplex Inc. (TSX: CGX) suffered a net loss of C$21.4 million in the second quarter of 2024, its latest financial results showed Friday.
- Cineplex reported revenues of C$277.3 million, down 24.6 per cent from C$367.9 a year earlier.
- Canada’s largest movie theatre chain is planning a share buyback program.
- Shares of Cineplex were up 3.9 per cent, trading at C$9.32 at 11:23 am ET Friday.
Cineplex Inc. (TSX: CGX) suffered a net loss of C$21.4 million in the second quarter of 2024, according to its latest financial results released Friday.
In a news release about the financial results for the three and six months ended June 30, Cineplex reported revenues of C$277.3 million, down 24.6 per cent from C$367.9 a year earlier.
Cinema media revenue increased 4 per cent despite attendance dropping 31.8 per cent, C$8.7 million in Q2 2024 vs. C$12.8 million in Q2 2023. Box office revenues per patron of C$13.11 (up from C$12.84) and concession revenues per patron of C$9.56 (up from C$9.21) were all-time quarterly records.
“Inside Out 2,” the year’s top-grossing film, was released in mid-June to help boost the quarter’s box office revenues to C$114.5 million. That was down 30.4 per cent from $164.5 million a year before partly because of the disruption to the movie release schedule from the writers’ and actors’ strikes in 2023.
Record-breaking “Deadpool & Wolverine,” which has earned more than US$903 million worldwide since coming out in July, bodes well for next quarter’s revenue, however. “Deadpool” momentum, new releases and the opening of new Rec Room and Playdium “eats and entertainment” venues helped Ellis Jacob, Cineplex president and CEO, provide optimism for the future. Plus, Canada’s largest movie theatre chain plans a share buyback program.
“The end of the second quarter was a turning point for our industry,” Jacob said in a statement. “As anticipated, the exhibition industry faced challenges in the first half of the year due to the prolonged impact of the Hollywood strikes, but with the two consecutive box office months of June and July over 90 per cent of pre-pandemic levels, it is clear these challenges are firmly behind us.
“We have increased confidence in the exhibition business with the ongoing ramp-up of film supply and our ability to generate strong free cash flow.”
Cineplex’s normal course issuer bid (NCIB) approved by its board of directors proposes to purchase for cancellation up to a maximum of 6,318,346 common shares, or approximately 10 per cent of its public float of 63,183,455 common shares as of Thursday, over the 12-month period following Toronto Stock Exchange approval of the NCIB.
“Cineplex is commencing the NCIB because the board of directors believes that the market price of the common shares does not reflect the intrinsic value of the company and the repurchase of shares would be in the best interests of the company and its shareholders and would represent an attractive and appropriate use of available funds,” Friday’s news release stated. “Decisions regarding the amount and timing of future purchases of common shares will be based on market conditions, share price and other factors.”
“We remain optimistic about the future. Our market leadership, diversified businesses, innovative strategies, and robust consumer data uniquely position us to capitalize on the tremendous film slate ahead and drive industry-leading results,” Jacob said.
Other Q2 2024 highlights
- Increased digital place-based media revenue (C$10.6 million in Q2 2024 vs. of C$2.3 million in Q2 2023) by 28.1 per cent primarily because of the addition of Cadillac Fairview to the digital-out-of-home network
- Location-based entertainment revenue increased to a second quarter record of $29.4 million
- Media revenues of C$29.1 million were an increase of C$3.0 million or 11.6 per cent compared with the prior year.
- Cinema media revenues of C$18.5 million were an increased of C$0.7 million or 4.0 per cent from the previous year.
- Theatre food service revenues of C$83.5 million decreased by $34.5 million or 29.2% compared with the prior year, primarily because of a drop in theatre attendance.
“We plan to accelerate our growth in the back half of 2024 and beyond, with proven strategies that continue to set us apart from our peers. We are excited about the opening of two Rec Room locations in Montreal and Vancouver, as well as a Playdium in Toronto,” Jacob said. Also, we are opening a new theatre at the Royalmount shopping complex in Montreal. These venues are expected to open in the fourth quarter of 2024.”
Cineplex Inc. is a household Canadian brand active in the film entertainment and content, amusement and leisure and media sectors. It operates more than 169 movie theatres and entertainment venues across the country.
Shares of Cineplex Inc. (TSX:CGX) were up 3.9 per cent, trading at C$9.32 at 11:23 am ET Friday. The stock is down 4.5 per cent from this year’s high.
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(Top photo of “Inside Out 2”: Disney-Pixar)