Cineplex Reports $178.4 Million First Quarter Loss Amid Pandemic

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Cineplex Cinemas

After Regal owner Cineworld called off its planned $2.1 billion takeover, Cineplex said it will stagger the reopening of its Canadian circuit after theatrical delays for 'Mulan and 'Tenet.'

Canada's Cineplex reported a $178.4 million loss in the first quarter after the global COVID-19 crisis shuttered its theaters and out-of-home entertainment venues since March.

During the latest quarter, the Canadian exhibitor posted a non-cash impairment charge of $173.1 million related to goodwill, right-of-use assets and property and leasehold charges. Overall revenues at Cineplex were down 22.4 percent to $282.8 million. First quarter box office revenues fell 29 percent to $111 million.

"As of today, we are in the early days of our reopening process. While it is impossible to predict how long this crisis will last and how significant the impact will be on our business, we know guests miss the magic of the big screen and sound, and have a new appreciation for shared experiences with friends and family that can't be replicated at home," Cineplex CEO Ellis Jacob said in a statement.

Also Monday, Cineplex revealed it has chosen to gradually open much of its Canadian circuit, excluding Ontario, from July 3 after Warner Bros.' Tenet and Disney's Mulan moved their tentpole release dates to August.

"With news of shifting release dates on a few major Hollywood titles, we are taking a more phased approach with our reopenings across Canada. We have reopened six theaters in Alberta on June 26, 2020, and will open select theaters across British Columbia, Saskatchewan, Quebec, New Brunswick, Nova Scotia and Newfoundland on July 3," a Cineplex spokesperson told The Hollywood Reporter.

Theaters in Ontario, Canada's biggest media market, have yet to receive a greenlight from local public health authorities to reopen after shutting down in mid-March in response to the global coronavirus pandemic. Cineplex staggering the reopening of its countrywide circuit follows rescheduled theatrical releases for Disney's Mulan and Warner Bros.' Tenet into August.

Like its U.S. peers, the Canadian movie chain will introduce a wide array of sanitary and social distancing measures, including staggered seating, to make customers feel comfortable amid ongoing concerns about the coronavirus pandemic. Cineplex has also made it optional for its patrons to wear face masks.

The release of the first quarter results followed the takeover of Cineplex by the U.K.-based Cineworld Group being called. That merger would have created one of the world's largest cinema companies with more than 11,200 screens globally.

Cineplex has denied it breached the terms of its merger agreement with Cineworld and plans to take legal action against its former suitor.

On June 19, Cineplex adopted a poison pill provision to prevent hostile suitors taking more than a 20 percent stake without complying with the company's shareholders rights plan. The company's first quarter results to March 31, 2020 were initially to have been released by May 15.

Cineplex's Jacob will hold an analyst call to discuss his company's latest financial results on Tuesday morning.