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Will movie theaters survive? Cinemark lost $170 million last quarter, but it’s optimistic.

The third largest movie theater company in the world has taken a nearly $230 million hit this year amid the coronavirus pandemic, but leadership at Cinemark and analysts are optimistic about the prospects of reopening theaters.

Plano, Texas-based Cinemark posted a loss of $170 million for the three-month period that ended June 30, telling investors Tuesday that it’s “been working diligently to prepare for reopening our theatres within this new operating environment.”

The company’s second quarter results reveal just how deeply the coronavirus pandemic has threatened the movie theater industry.

Cinemark’s revenue in the first half of 2020 was roughly a third of what the company reported in 2019, or $552.6 million compared to $1.67 billion.

And analysts have noted as recently as last week that it could take Cinemark years to return to the profitability levels it saw in 2019.

Cinemark leadership, however, expressed optimism about customer response to its reopening efforts and a slate of major Hollywood releases ready for the big screen. Most of summer’s highly anticipated movies have encountered delays resulting from the virus.

“We think 2021 is more of a transition year, with really strong product coming from both ’20 and ’21, and ’22 is going to be the year where it more normalizes,” Cinemark CEO Mark Zoradi said on a call with Wall Street investors Tuesday.

The company reopened a handful of theaters in early June as it began experimenting with health and safety protocols. About 13,000 moviegoers visited what Cinemark dubbed its test-and-learn locations.

In a statement, Zoradi said theatergoers approve of how the chain is sanitizing theaters, with 97% of guests expressing “high satisfaction with how Cinemark is protecting their health and safety.”

“We believe the comprehensive cleaning and safety protocols we have established … will enable us to effectively operate our theatres while prioritizing the health of our employees, guests and communities,” Zoradi said.

Cinemark was the first major theater chain in North Texas to welcome moviegoers back amid rising coronavirus cases. It started a four-phase reopening process on June 16 at five Dallas-Fort Worth cinemas.

According to Cinemark, its theaters have served 45.8 million customers in the first half of a year. It was forced to close theaters in March amid the pandemic.

It plans to begin rolling out its reopening of movie theaters beginning Aug. 21. There’s no guarantee that moviegoers will feel confident about returning to indoor environments in the near future as coronavirus cases surge across the U.S.

But CFO and COO Sean Gamble told investors in April that the movie theater chain could turn a profit with 20% to 30% occupancy levels at its locations, meaning a socially distant movie viewing experience could still bode well in the near term.

The company has already slashed executive compensation, cut corporate jobs and laid off 17,500 hourly workers to save costs.

Cinemark’s biggest competitors are AMC Theatres and Regal Entertainment — two companies that did not have the strongest balance sheets going into the pandemic. AMC has even hinted that it may need to file for bankruptcy, though it recently eased investor concerns by restructuring debt.

Cinemark — which includes Century, Tinseltown and Rave-branded theaters — operates 534 theaters in 41 states and 15 countries.

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