Cinemark stock rises again as Q2 losses narrow

 

It’s unusual for an overall loss to stimulate positive market interest, but with Cinemark Holdings announcing a narrowed loss for their new Q2 period, the market has seen reason to take another look at the beleaguered chain. Brandon Blake analyzes this strange market shift.

It’s no secret that the theater industry has been one of the hardest hit by global shutdowns through the 2020 period. The newly-announced Q2 loss of $142.5M still represents an improvement on the $170.4M reported for Q2 2020. Likewise, overall revenue has risen to $294.7M, vs $9M at the same point last year.

Breaking these figures down further, we see $153.5 from direct admissions, and $109.8 concessions, and 19.1 million patrons in attendance. Not too bad from an industry hit so badly by pandemic closures. Overall, this second-quarter recovery is somewhat more accelerated than previously predicted, too. The North American Box Office itself has tripled from the first quarter.

Cinemark is also keen to show the positive adjusted earnings from the last quarter, the first time they’ve reached the green since the theater circuit was reopened. It’s not hard to construe these figures as the industry reaching something of a ‘break-even’ point on the road to recovery. On the back of these figures, a full positive cash flow is expected for the latter half of the year. 

It’s not going to be smooth sailing, with a resurgence in COVID infections threatening the theater industry again. In fact, we’ve also seen Cinemark announce that employees will be required to once again wear masks from this week to address these concerns.

As of now, however, there are no significant new requirements that will affect cinema attendance or capacity, and a robust recovery for the exhibition sector still seems to be on the cards, at least in the opinion of this entertainment lawyer.