Movie theatre chain Cineplex Inc. (NYSE:CGX) has received some relief from its lenders after reporting that its revenue fell 85% in the third quarter.
The Toronto-based company announced third quarter results that missed analysts’ expectations. Revenue declined 85% to $61 million ($46 million U.S.) from $418.4 million a year ago. Analysts were expecting revenue of $65.8 million.
Following its quarterly results, Cineplex struck a deal with its lenders to get relief on its financial covenants through to the second quarter of 2021. The company says it is trying to slow the rate at which it uses cash. Cineplex burned about $16.6 million in cash per month in the third quarter and has been burning $15 million to $20 million a month since the onset of the Covid-19 pandemic. The company is looking to sell its head office to raise money.
Cineplex gradually reopened theaters over the summer at limited capacity, but had to temporarily shut them again in parts of Canada in October after a second wave of Covid-19 hit. Attendance at theaters fell 91% in the third quarter. The movie theatre chain said it will not reopen its locations in Toronto, Ottawa and Peel region anytime soon even if restrictions are relaxed due to concerns “from a financial perspective.”
Like other movie theatre chains, Cineplex is being hurt by the delay of several big budget films. Last month, Metro-Goldwyn-Mayer (NYSE:MGM) pushed back the release of the James Bond film “No Time To Die” to April. Several tentpole Marvel superhero movies have also been delayed, as has a long awaited sequel to the movie “Top Gun.”
Cineplex shares soared 32% last week after Pfizer Inc. said that its vaccine, developed with BioNTech SE (NASDAQ:BNTX), protects most people from Covie-19. The stock is down 81% this year at $6.61 a share and was removed from the S&P/TSX Composite Index on September 21.