Cineplex Earnings Jump on 'Avengers: Infinity War' Box Office
The exhibition giant beat profit expectations as Canadians also came out to see 'Deadpool 2' and 'The Incredibles 2'
A strong Hollywood film slate and diversifying from its core exhibition business helped Canada's Cineplex post higher second quarter earnings and revenues on Friday, which beat analyst forecasts.
Toronto-based Cineplex, led by CEO Ellis Jacob, saw net income jump to $24.4 million, or 38 cents per-share, against a year-earlier $1.4 million, or 2 cents a share. Analysts polled by Thomson Reuters had forecast per-share earnings of 24 cents.
Overall revenues were up 12.4 percent to $409.1 million, which missed on an analyst estimate of $414 million. The breakout success of Avengers: Infinity War, and strong performances for Deadpool 2 and The Incredibles 2 at Cineplex theaters during the latest financial frame helped the chain post record second quarter box office revenues of $187.2 million, up 9.7 percent from a year-earlier $170.7 million.
Overall attendance at the Cineplex multiplexes jumped 5 percent to 17.3 million patrons, and there was more spending per moviegoer. Cineplex CEO Ellis Jacob told The Hollywood Reporter he was bullish on his company's prospects going forward, given a strong studio movie slate heading into 2019, and moves by his company to diversify away from fluctuating Hollywood box office.
"The bottom line is, when (Hollywood) content is there, people want to get out of their homes and have a social experience, and this past quarter was a prime example of that happening," Jacob said. He added Cineplex is branching out beyond its core exhibition business to offer branded Rec Rooms full of bars and video games, microchip-assisted golf centers and alternative live opera, theater and sporting content on its screens as new out-of-home entertainment destinations.
"I'm not diversifying because I don't have confidence in the movie business. The challenge is we depend on someone else's product," Jacob argued. So Cineplex is looking to grow other entertainment ventures to better control its fortunes.
"It's about owning the guest's time and entertainment dollars. If you're not at my theatre, you're at my Rec Room, or my TopGolf, or you may be at home with Uber Eats and watching a movie from our download," Jacob said. Cineplex and Uber Eats recently partnered on home delivery of its concession snacks and combos from 60 theaters nationwide, as Canadians increasingly choose to view movies on Netflix Canada and other streaming services, or download a Hollywood movie from the Cineplex online store.
During the latest quarter, Cineplex saw its box office revenue per patron increase 4.4 per cent to a record $10.82 after price increases in selected markets, while revenue concession per patron rose 9.3 per cent to $6.59.