Cineplex Inc. (TSX:CGX) reported a 95% drop in revenue and a $40 million U.S. cash burn during the second quarter as the global pandemic shut movie theaters.
Cineplex said it lost $98.9 million ($74.7 million U.S.) in the second quarter and said free cash flow was negative $53.8 million on an adjusted basis. Canada’s largest chain of movie theaters has gradually reopened cinemas across the country as it emerges from a lockdown that began in March. As of August 14, 80% of movie theatres had resumed operations, with the remaining 20% set to open by next week.
The Toronto-based company said it’s "implementing a number of pricing and marketing strategies to entice its guests to return." Many theaters have already reached capacity under physical-distancing rules, and attendance numbers are expected to increase as new films come out, according to the company.
Cineplex said in June it was working with lenders on a deal to relax financial covenants after London-based Cineworld Group Plc, the world’s second-largest cinema group, scrapped its plan to take over the Canadian movie theatre chain. The aborted merger would have created the biggest operator of movie theaters in North America.
Cineplex’s stock is the worst performer in the S&P/TSX Composite Index so far this year, down nearly 75%.
