Cineplex CEO Ellis Jacobs says the Ontario government’s new restrictions in Toronto, Ottawa and Peel region are “excessive” and fail to take into consideration safety precautions at the movie theatre chain.
Speaking during the company’s virtual annual shareholder meeting on Tuesday, Jacobs said Cineplex is “definitely disappointed” with the government’s new restrictions, which include the shuttering of all cinemas in Toronto, Ottawa and Peel regions for for 28 days.
“We feel that these forced closures, given our proven track record, are excessive and do not consider our team’s efforts, of which we are very proud,” he said, adding that in the 98 days since Ontario allowed movie theatres to re-open, the company has had zero cases of COVID-19 traced back to its operations.
“I can’t stress enough that our top priority remains the health and safety of our employees and guests, and we take pride in ensuring that we always deliver an environment that is above all safe, comfortable and welcoming.”
Cineplex’s stock (CGX.TO) fell as much as 6.7 per cent in early trading on Tuesday. It was down nearly 2 per cent as of 10:26 a.m., trading at $4.54.
Canada’s largest movie theatre chain has struggled since the coronavirus pandemic upended the entertainment business, forcing chains around the world to close theatres and movie production companies to delay key releases. Last week, Cineplex’s stock fell 29 per cent after the new James Bond film was delayed to 2021.
Cineplex is also in the midst of a legal battle with Cineworld, after the U.K. company walked away from a deal to purchase the Canadian theatre chain last year for $34 per share. Jacobs said the company believes Cineworld has “no legal basis” to scrap the deal, and that it is “attempting to avoid its obligations in light of COVID-19.”
Cineplex is burning through $18 million in cash per month, down from $20 million per month in the previous quarter, chief financial officer Gord Nelson said Tuesday.
When asked by a shareholder about plans if movies are further delayed – including the film Wonder Woman, which is currently slated for a Christmas day release – Jacobs said the company is in a positive position.
“As of late last evening Wonder Woman is still dated for Christmas, but it will largely depend on the level of the pandemic as to whether Warner Brothers decides to move the movie into 2021,” Jacobs said.
“As it related to cash burn and theatres remaining open... we are in a positive position from the theatres being open and that’s largely a result of being very focused on costs, taking advantage of government (program) availabilities and working with our suppliers.”
He also expects 2021 to be “an exceptionally strong year” at the box office.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.