Cinemark Swings to $120M Profit on Box Office Recovery
Shares in Cinemark rose in Friday premarket activity after the exhibition giant posted stronger admissions and concessions revenue amid a continuing box office recovery.
Cinemark posted a quarterly profit of $120.4 million, compared to a year-earlier loss of $73.4 million, on overall revenue of $942.3 million, against $744.1 million in the second quarter of 2022, when the exhibition industry’s box office recovery kicked into gear following the COVID-19 pandemic.
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Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profitability metric, grew to $231.5 million, compared to $138.3 million a year ago.
Despite that improved balance sheet, Cinemark president and CEO Sean Gamble warned analysts during a morning call that the on-going Hollywood actors and writers strikes stood to delay production of future movies and shift dates for upcoming theatrical releases.
“We certainly remain hopeful for a timely resolution, not only with regard to implications for the theatrical exhibition industry and our studio partners, but also for the sake of the many individuals within the extensive creative community who are directly affected by this work stoppage,” he argued.
Gamble added Cinemark was “well situated to confront any ongoing fluctuations in content flow” due to its improved financial and operating footing coming out of the pandemic. He added the major Hollywood studios were “doing everything they could to minimize the disruption of product flow,” even as Gamble insisted he had little visibility on the overall impact anticipated for the rest of 2023 and into next year.
“A lot of that is going to ultimately depend on how long the conversations and the negotiations continue and the availability of different resources that may be required for writing or just promotional support,” Gamble ventured.
The Cinemark topper also reiterated his optimism about Apple following Amazon in a theatrical push. “Amazon and Apple are now expressing intentions to scale theatrical film production over the next few years to levels that are comparable to the major studios,” Gamble told analysts.
He also talked about the company continuing to use data and analytics to develop new ways of handling ticket and concessions prices. “We’ve for a long while had varied pricing throughout the day and throughout the week that’s tailored to high level demand patterns that we’ve seen over time,” Gamble said.
In the U.S., Cinemark hosted 38.8 million patrons in the April-June period, compared to a year-earlier 34 million, and the average ticket price rose to $9.62 during the second quarter, up from $9.11 in the same period of 2022.
For the three months to June 30, admissions revenue rose 25.3 percent to $478.4 million and concession revenue jumped 30.6 percent to $373.4 million, driven by higher overall attendance to 64.4 million patrons during the latest financial quarter.
Outside the U.S., attendance in Latin America was also up for Cinemark’s international theaters, to 25.6 million patrons, against a year-earlier 18 million moviegoers.
“The strength of the second quarter’s film lineup, supplemented with the ongoing benefits we are achieving from our strategic initiatives, translated into exceptional second-quarter results across our entire global footprint,” Gamble said in a statement ahead of the morning analyst call.
Shares in Cinemark rose in premarket trading by 93 cents, or 5.3 percent, to $18.25.
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