Cinemark CEO Sean Gamble is confident that the current strikes in Hollywood will not have a significant impact on the revival of the exhibition business. While the strikes may slightly delay the volume of theatrical film releases, Gamble believes that the key fundamentals of the industry, such as consumer interest in moviegoing and studio intentions to rebuild film output, will remain unaffected. He expressed hope that the strikes will be resolved soon, as negotiations between the WGA and AMPTP are set to take place.
Studios have already begun adjusting release dates, but it is still uncertain if there will be further shifts by the end of the year. Gamble emphasized that studios now recognize the value of exclusive theatrical releases and do not plan to scale down film production. He mentioned that Amazon and Apple will contribute to the market with multiple releases each year. The success of films like “Barbie” and “Oppenheimer” has demonstrated the power of exclusive theatrical releases.
Gamble also highlighted the growing popularity of faith-based, multi-cultural, anime, and concert films, which now account for 7% of Cinemark’s box office. He mentioned the crossover appeal of multicultural movies and the success of films like “RRR” and “Sound of Freedom” with broader audiences. Strategic pricing of tickets and concessions also presents ongoing opportunities for the company.
Financial analysts raised concerns about the strikes during the earnings call, and Gamble acknowledged that it is a significant topic for the investment community. However, he remains confident in the long-term prospects of theatrical exhibition and believes that Cinemark is well-positioned to benefit from the industry’s recovery.
Cinemark’s recent financial performance has been positive, with a net profit of $119 million for the second quarter of this year, compared to a loss of $73 million in the same period last year. Revenue increased by 26%, driven by a 25% increase in admissions revenue and a 31% increase in concession revenue. Adjusted EBITDA reached $232 million, the second-highest quarterly result in Cinemark’s history. The company also strengthened its balance sheet by generating $215 million of free cash flow and paying down $100 million of debt.
Overall, Wall Street has responded positively to Cinemark’s performance, with shares rising by approximately 2.5% to $17.75.