Cineplex Q4 Revenue Rise 472%, Loss Shrinks

Cineplex (TSE: CGX) revenues rose sharply in Q4 2021, and its loss shrank as more people went to the movies.

Canada’s largest movie theater was helped by movie releases in October and November, but faced capacity restrictions and closures at the majority of its locations in late December.

Revenue & Earnings

Revenue for Q4 2021 came in at C$300 million, an increase of 471.9% from the revenue of C$52.5 million reported in Q4 2020. Box office revenues were C$125.9 million, compared to C$7.3 million a year earlier when theaters were closed for most of the quarter. Food services revenues increased 727.5% to C$87.2 million during the quarter.

Cinema media revenue increased 16x to C$22 million, while amusement revenues increased by 231.7% to C$45.1 million. Other revenues increased to C$8.9 million from C$8.6 million a year ago.

Cineplex reported a net loss of C$21.8 million (C$0.34 per diluted share) in the quarter ended December 31, compared to a net loss of C$230.4 million (C$3.64 per diluted share) in the prior-year quarter.

During the quarter, Cineplex launched loyalty program Scene+ in partnership with Scotiabank (TSE: BNS) (NYSE: BNS).

CEO Commentary

Cineplex president and CEO Ellis Jacob said, “Cineplex delivered its strongest quarter in two years. Based on the positive momentum we saw during the quarter, and the success of blockbuster films like Spider-Man: No Way Home, we know that guests are coming back to our theatres. Government mandated restrictions and closures in Ontario, Quebec and Atlantic Canada during the busiest box office period constrained our ability to fully capitalize on this resurgence in the fourth quarter as compared to other geographies, including the U.S.”

Wall Street’s Take

Five days ago, RBC Capital analyst Drew Mcreynolds kept a Hold rating on CGX and a C$15 price target. This implies 11.2% upside potential.

The rest of the Street is bullish on CGX with a Strong Buy consensus rating based on four Buys and one Hold. The average Cineplex price target of C$18.30 implies 35.7% upside potential to current levels.

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