Cinemark reported financial results for the second quarter that revealed the massive toll of COVID-19, with $9 million in total revenue and a loss of $1.45 per share.
Those figures managed to exceed Wall Street’s conservative estimates for the desolate April-to-June period, however. The No. 3 U.S. exhibitor also said its limited “test-and-learn” re-openings in the quarter were helpful preparation for a planned August 21 start to a full return of the theater circuit.
In all, about 13,000 customers bought tickets for screenings of library film titles in a select number of theaters, the company said. Those screenings generated $37,000 in admissions revenue and $57,000 in concessions. The total revenue figure for the quarter reflected the amortization of deferred screen advertising advances from Cinemark’s partner, National CineMedia.
“While our company and industry continue to be significantly impacted by the coronavirus pandemic, our team has been working diligently to prepare for reopening our theatres within this new operating environment,” CEO Mark Zoradi said in the earnings release.
He described “comprehensive” cleaning and safety protocols that he dubbed The Cinemark Standard. “Our test-and-learn theatres have been instrumental in honing the training, communication, and execution of The Cinemark Standard, as well as garnering guest insights regarding its implementation,” he said. “We are thrilled that 97% of guests surveyed have expressed high satisfaction with how Cinemark is protecting their health and safety.”
When Cinemark reported its last quarterly numbers, it had been eyeing a full return of its theaters by late June, with Warner Bros’ Tenet kick-starting the summer in early July. The subsequent spikes in COVID-19 infection rates across the country have made that plan impossible. Tenet will now open in 70 overseas territories later this month, with a planned U.S. rollout starting in September — though even that pattern is far from guaranteed given current virus trends.
Compared with rivals AMC and Regal Cinemas (which is owned by UK firm CineWorld), Plano, TX-based Cinemark has won praise among Wall Street analysts for its conservative management style. It has not encountered the serious debt issues confronted by AMC and has said it has sufficient cash reserves to endure long-term pressure on its business. The outlook on the theatrical sector has been shifting continuously in 2020, however, to take into account new factors like potentially shorter theatrical release windows in light of AMC’s deal with Universal.