Cinemark Cuts Losses to $73M Amid Strong Box Office Recovery
Movie theater giant Cinemark Holdings improved its bottom line in the second quarter and on Friday touted higher revenue and a continued industry recovery from the COVID-19 pandemic.
The company, led by president and CEO Sean Gamble who succeeded Mark Zoradi on Jan. 1, posted a quarterly loss of $73.4 million. That compared with a loss of $142.4 million in the same period of 2021. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, swung to $138.3 million for the three months, compared with a year-ago loss of $11.8 million.
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Second-quarter revenue jumped 153 percent to $744.1 million amid higher attendance and concession spending compared with the year-ago period. After all, due to the COVID pandemic, “for a portion of the three months ended June 30, 2021, some of the company’s theatres were closed and there was limited new film content available for the theatres that had reopened,” the firm noted.
Among the second quarter’s big theatrical releases were the likes of Top Gun: Maverick, Doctor Strange in the Multiverse of Madness and Jurassic World Dominion.
“Continued improvement in consumer sentiment, as well as a more consistent release cadence of compelling new films with broad consumer appeal and an exclusive theatrical window, yielded the highest quarterly box office since the inception of COVID-19,” said Gamble. “Cinemark fully delivered on this sustained recovery in the second quarter, including domestic box office performance that surpassed North American industry results by over 300 basis points with the largest share gain of all the major exhibitors when comparing the second quarter of 2022 against the second quarter of 2019.”
He added: “Likewise, our second-quarter Latin American admissions outpaced its corresponding industry benchmark by approximately 400 basis points over this same time frame.”
On the earnings call, Gamble emphasized how the finances of the movie theater chain are more impacted by the upcoming film slate, rather than economic concerns.
“As concerns are growing about a potential US recession. It’s important to remember that theatrical moviegoing provides a reasonably priced, premium out-of-home entertainment experience and the domestic box office actually grew in three of the past four recessions,” Gamble said on the earnings call.
However, this means that company’s third-quarter results will likely be impacted by a decrease in the volume of new films in the next two months, which Gamble said was due to seasonality as well as pandemic-related production delays. AMC warned of a similar impact to its earnings.
After that slump, the company expects a boost from upcoming 2022 films such as David O. Russell’s Amsterdam, Black Panther: Wakanda Forever and DC Comics’ Black Adam, starring Dwayne Johnson. Looking further into 2023, Gamble pointed to a strong release schedule in the first half of the year, including Ant-Man and the Wasp: Quantumania, Guardians of the Galaxy Vol. 3, John Wick: Chapter 4 and The Little Mermaid.
Building on the movie theater chain’s recovery since the start of the pandemic, Cinemark said it had invested in new marketing and branding materials, including a new logo.
Concluded the CEO: “As a result of our sustained investments over the years, the operating enhancements we’ve made throughout the pandemic and the further advancements we are achieving through our strategic initiatives, we believe Cinemark remains exceptionally well-positioned to navigate the ongoing recovery of our industry and fully capitalize on its continued resurgence.”
Plano, Texas-headquartered Cinemark has 520 cinemas with 5,849 screens in 42 U.S. states and 15 countries throughout South and Central America. Its circuit comprises various brands, including Century, Tinseltown and Rave.
