Cineplex reports loss of $98.9 million for Q2 after theatres closed

Cineplex Inc.’s chief executive hopes that ending an agreement with a virtual reality golf company, films debuting in Canada before the U.S. and a slew of measures to halt the spread of COVID-19 will right his business as it struggles with mounting costs for movie theatres that sat closed for months.

Ellis Jacob said Friday that his Toronto-based entertainment company had decided to mutually call off a deal with TopGolf that would have brought its sports complexes to Canada because it’s “simply not an opportune time” to invest in large projects.

He was simultaneously rejoicing at studios allowing Canada to debut new releases such as Spongebob: Sponge on the Run, Unhinged and Christopher Nolan’s Tenet ahead of the U.S., which he hoped would draw audiences back to the movies.

“This is a very unusual occurrence,” Jacob said. “Given what we have done in terms of keeping the guests safe during the pandemic, we got the international release dates and we are really proud of that.”

His remarks came as Cineplex reported a loss of $98.9 million or $1.56 per share in its second quarter, compared with a profit of $19.4 million or 31 cents per share in the same quarter last year.

Revenue for the quarter ended June 30 totalled $22 million, plummeting 90 per cent from $438.9 million, while its cash burn rate fluctuated between $15 million and $20 million every month.

The company was hurt when it was forced by governments to keep its theatres closed for months due to the pandemic, resulting in temporary layoffs, slashed salaries and tussles with landlords over rent.

Jacob warned analysts on a call Friday morning that the company would take more “bold action” if necessary, but for now, he is focused on welcoming guests to theatres.

To get them back, Cineplex is offering cheaper movie tickets, reserved and distanced seating, increased cleanings and screenings of NHL and NBA games.

Jacob said the plan is already working. “It is clear that Canadians miss the big screen and want to come back,” he said.

Jacob is managing the fallout from Cineworld Group PLC walking away from a $2.8-billion deal to buy Cineplex.

Cineplex has filed a lawsuit against its former suitor over the failed deal.

The matter is set to make it to trial in September 2021, but could be delayed further, Jacob said.