Canadian movie theatre chain Cineplex Inc. (TSX:CGX) is being removed from the S&P/TSX Composite Index.
Cineplex is being removed from Canada’s benchmark stock index on September 21, according to a news release from S&P Dow Jones Indices. The move comes a month after the movie theatre chain began a phased re-opening of its cinemas after they were shuttered by the COVID-19 pandemic.
Cineplex’s shares plummeted in 2020, in part due to the losses the company sustained while its theatres were closed, but also due to the collapse of its planned $2.15-billion takeover by U.K. cinema chain Cineworld Plc. That deal was canceled in mid-June.
Cineplex shares closed at $31 on March 10, the day before the COVID-19 outbreak was officially declared a pandemic by the World Health Organization. Cineplex shares were trading at the start of this week at $8.20, a drop of nearly 75%.
The company said its second-quarter revenue fell by 95% to a total of $22 million. Despite the revenue drop, Cineplex Chief Executive Officer Ellis Jacob has expressed his optimism for the company’s future success on multiple occasions during the pandemic, citing the strength of coming movie releases and the promotional role cinemas play in the film industry.
However, Cineplex has suffered from distributors seeking other outlets for movies and restricted audience sizes due to social distancing. The Walt Disney Company did an end-run around cinemas with its live action version of 'Mulan,' offering the film for a premium fee of $34.99 on its Disney+ streaming service.
Even Christopher Nolan’s latest movie 'Tenet' – which had been scheduled for a July 17 release by Warner Bros. Pictures – has been hampered by attendance restrictions. The film opened to $20.2 million U.S. in North American box office over the Labour Day weekend. In contrast, Nolan’s previous film – the World War II epic ‘Dunkirk’ – opened to a weekend gross of $50 million U.S. in July 2017.
