The Financial Post reports in its Saturday, Nov. 14, edition that Cineplex reached an agreement with lenders for relief on its covenants to the second quarter of 2021 after it saw revenue plummet due to capacity restrictions in cinemas.
A Bloomberg dispatch to the Post reports that Cineplex announced third quarter results that missed analyst expectations.
Revenue declined 85 per cent, to $61-million from $418.4-million a year ago. Analysts were looking for $65.8-million.
Bloomberg notes Cineplex is trying to slow the rate at which it uses cash. It burned about $16.6-million in cash per month in the third quarter and has been burning $15-million to $20-million a month since the onset of COVID-19.
Cineplex gradually reopened theatres over the summer at limited capacity, but had to temporarily shut them again in parts of Canada in October after a second wave of COVID-19 hit. Attendance at theatres fell 91 per cent in the third quarter.
Cineplex said it will not reopen its locations in Toronto, Ottawa and Peel region anytime soon even if restrictions are relaxed due to concerns "from a financial perspective." Cineplex is being hurt by the delay of several big-budget films.
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