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Movie theater giant Cinemark continued to improve its losses in the third quarter, reporting a net loss of $24.5 million in the three months ended Sept. 30, 2021, compared to a net loss of $77.8 million a year earlier.
Revenue increased to $650.4 million, up from $434.8 million in the third quarter of 2021. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $99.5 million, compared with $44.3 million a year earlier.
Admission revenue was $324.6 million and concession revenue was $253.6 million, coming from attendance of 48.4 million patrons. This too came in above 2021 results, even as movie theaters have bemoaned the lack of content this fall due to COVID-19 delays.
However, it did impact the cinema chain’s free cash flow for the quarter, which dropped to negative $43 million. Cinemark still expects to generate positive free cash flow for the full year due to the slate of stronger films in the fourth quarter, which includes Black Adam, Ticket to Paradise, Black Panther: Wakanda Forever and Avatar: The Way of Water.
“While August and September were challenged by a dip in content availability, we are pleased by year-over-year improvements in product flow throughout 2022, which have driven a 130% increase in North American box office year-to-date. We have high confidence in the ongoing recovery of content and box office as delays caused by COVID fully subside and studios derive increasing promotional and financial value from theatrical,” said Sean Gamble, Cinemark’s President & CEO.
If historic trends prevail, Gamble said Cinemark currently expects to see about 85 wide releases next year, and that’s not counting many small and mid-tier studios which have not yet announced their slate.
As studios lean back into theatrical releases, Gamble said Cinemark also remains “very optimistic” that streaming companies will also increase their use of theatrical releases, saying, “We’re getting that indication from them.”
This comes as Netflix plans to release Glass Onion: A Knives Out Mystery at Cinemark Theatres as well as AMC Theatres and Regal Cinemas this month, ahead of its release on the streaming platform. Still, Netflix co-CEO Ted Sarandos recently appeared to back away from a bigger push into theatrical, saying “There’s no question internally that we make our movies for our members, and we really want them to see it on Netflix.”
While average ticket price was $6.71, up 10 percent from pre-pandemic levels, National Cinema Day, in which Cinemark offered $3 movie tickets on Sept. 3, drove down the price for the quarter. The day brought “significant attendance” for the theater chains, but created a 17 cent headwind in the U.S.
Movie theaters have historically been resilient in recessionary periods. Gamble said Cinemark has not yet seen an impact from macroeconomic trends. Concession per caps are up more than 30 percent compared to 2019, because consumers are purchasing more than they did pre-pandemic, and consumers are still choosing premium, higher priced experiences.
“We remain highly optimistic about the future of theatrical exhibition and Cinemark,” he said. “Consumer behavior over the past year validates that moviegoing enthusiasm remains strong and vibrant across all categories of films and audiences. Quarter after quarter, genre by genre, we’ve seen long-standing records broken and films performing at levels comparable to, or better than, pre-pandemic expectations.”
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