The North American box office has somewhat returned to form as the economy has largely reopened in the second half of 2021. Last weekend, the top performers were the science fiction epic Dune, Halloween Kills, and the final Daniel Craig Bond film No Time to Die. Fortunately, the traditional cinema has also received an assist from Disney.
Two of the top three movies in 2021 have been Disney releases. In September, the media giant announced that it would no longer offer new release immediately on its Disney+ platform. This should provide some relief to cinema operators who are already in a tough battle with streaming services over the entertainment dollar.
Cineplex (TSX:CGX) is the top cinema operator in Canada. Its shares have climbed 161% year-over-year as of early afternoon trading on October 29. The company is set to release its third quarter 2021 results on November 11.
In Q2 2021, theatre attendance rose to 1.1 million – up from no attendance as Cineplex was forced to shutter its door in the second quarter of 2020. Meanwhile, adjusted free cash flow increased 248% to a loss of $81.9 million. This is an area where Cineplex must improve in order to survive in the months and years ahead.
Cineplex is a risky pick as the future is still very uncertain for the traditional cinema. There are some big film releases in the holiday season that will provide a fantastic litmus test at the end of 2021.
