Canada's largest theatre chainsaw 91 per cent fewer moviegoers during the summer compared with last year, pushing the company to roll out new offerings for film lovers.
Cineplex Inc. said Friday that only 1.6 million people visited the movies during its third quarter, down from 17.5 million in the third quarter of 2019.
To lure moviegoers back, the company will heavily market affordable private theatre rentals ahead of the holiday season. It will also cut back on new projects and try to further reduce real estate and payroll costs with the sale of its head office in Toronto and the federal government's wage subsidy program.
"We've done all the things we can to make sure we get through, and we feel strongly about the exhibition industry's ability to recover," Ellis Jacob, Cineplex's president and chief executive, told The Canadian Press.
Earlier, Cineplex reported a net loss of $121.2 million or $1.91 per share, down from the $13.4-million or 21-cents-per-share profit it reported last year at the same time.
The chain's revenue was $61 million in the three months ending Sept. 30, down from $418.4 million during the same period in 2019.
Analysts expected Cineplex to lose $57.3 million or $1.31 per share, according to financial data firm Refinitiv.
The company has been rapidly trying to reverse such results, which were triggered by waning audiences amid temporary theatre closures ordered by public health officials in COVID-19 hot spots.
Cineplex's efforts to cope with pandemic changes have included raising an extra $303 million in credit, materially reducing net cash lease outflows by about $58 million and pursuing the sale of its head office location with the potential for a leaseback transaction.
"We completed a thorough review of our rights under our lease agreements and where we thought we had attractive rights, we approached landlords to monetize some of these rights," chief financial officer Gord Nixon told analysts on a Friday call.
Cineplex has also temporarily laid off staff, slashed salaries and used $22.5 million from the government's wage subsidy plan to reduce payroll expenses to $3.9 million during the quarter, down from $40.9 million at the same time last year.
On Friday, it introduced private auditorium rentals for as low as $125.
The venture will allow up to 20 guests to enjoy a film together while distancing and will include a choice of 1,000 movies including holidays hits The Grinch and Love Actually.
"We wanted to get it out there because it gives guests another opportunity and we've done it so you can get a movie at an accessible price point, you can buy it online which makes it a lot easier and you can have a great social experience," Jacob said.
However, returning to 2019 levels of revenue is still expected to be tough.
Cineplex is suing Cineworld, a U.K. based theatre operator that was due to buy Cineplex for $2.8 billion.
Cineworld walked away from the deal on June 12, saying it had become aware of a material adverse effect and breaches by Cineplex, which has vehemently denied the accusations.
Meanwhile, local health rules have greatly reduced the number of moviegoers Cineplex can welcome at a time and the chain has had to pay for extra sanitization and the costs that come with physically distancing guests and protecting staff.
In Maritime provinces, Alberta and British Columbia, Jacob said audiences have been returning to theatres faster than elsewhere and in some places where Remembrance Day was a holiday, Cineplex saw a spike in attendance.
Those who made visits have seen few of the big blockbusters originally planned for the year because studios and distributors have been pulling new releases and rescheduling them for 2021, when they hope the virus will be more contained.
Christopher Nolan's Tenet was one of the few new features moviegoers were treated to. Cineplex screened the film ahead of it being released to U.S. audiences – a rarity in the movie world.
One of the last major releases that has yet to be moved from this year is the sequel to Wonder Woman, which Jacob said he has been talking to Warner Bros. about.
Some believe the studio will move its release until next year. If they do, Cineplex still has other movies coming like the Toronto International Film Festival's People's Choice Award winner "Nomadland" and "News of the World" starring Tom Hanks.
"When I look at 2021, I think holy crow, I am going to be going to the movie theatre every night," Jacob said.
For those unwilling to visit a theatre during the pandemic, Cineplex has long offered home movie rentals and delivery of concession stand favourites like popcorn via Uber Eats or SkipTheDishes.