Cineplex Q4 profit falls as attendance declines

TORONTO Cineplex Inc. saw a dip in theatre attendance and net income in its latest quarter, even as it began screening a handful of Academy Award contenders.

The Toronto-based entertainment giant said its fourth quarter — the start of the annual awards season — brought $27.2 million in net income, down from $28.8 million a year earlier.

That profit for the period ended Dec. 31 amounted to 43 cents per share, down from 45 cents per diluted share the year before and from the 46 cents per share that analysts had expected, according to Thomson Reuters Eikon.

Despite the debut of buzzed about films, including A Star is Born, Bohemian Rhapsody, Green Book and Vice, Cineplex said attendance was down 3.2 per cent from a year earlier.

Cineplex shares were down 7.4 per cent on the day at $25.14 in Toronto.

Cineplex’s president and chief executive Ellis Jacob attributed the dip in attendance to the unusual strength of last year’s fourth quarter film slate. “Last year you had Star Wars: The Last Jedi and Jumanji: Welcome to the Jungle that was incredible for business,” he said. “On a year-to-date basis, we are slightly below because of the comparative to last year, but today we open Alita:Battle Angel, next week we open How to Train Your Dragon 3 and I think Captain Marvel, which opens (in March), is going to be the biggest movie of the quarter.”

Despite the drop in attendance and net income, the quarter did deliver some bright spots. Revenue was up less than a percentage point year over year, at $428.2 million in the fourth quarter of 2018 and $426.3 million in the comparable period of 2017.

Box office revenue per patron was up to $10.73 from $10.54 the year before and concession revenue per patron also climbed to $6.53 from $6.29.

Because of its inability to control the film slate, Cineplex has focused heavily in recent years on concession stand offerings. It partnered with Uber Eats to begin delivering snacks including popcorn, hotdogs, candy, nachos and soft drinks to customers in 60 communities throughout Ontario, Alberta, B.C. and Quebec in 2018.

Last February, Jacob said the company was toying with letting moviegoers order snacks from their mobile phones before heading to theatres. The offering has yet to be rolled out for customers beyond VIP, but Jacob said “it will eventually get to everybody.”

It has also signed a partnership with CJ 4DPLEX to bring 4DX — full motion seating with effects including water, rain, fog and scents — to up to 13 theatres and another to pilot ScreenX technology, which offers a 270-degree, panoramic movie-watching experience.

Looking ahead, Jacob said the year will bring the opening of four Rec Rooms and two Playdiums, doubling the size of the company’s restaurant and gaming facility business.