Breaking News
Investing Pro 0

Struggling Cineworld paints bleak picture for cinemas

Stock Markets Sep 30, 2022 13:47
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: People walk past a Cineworld in Leicester's Square, amid the coronavirus disease (COVID-19) outbreak in London, Britain, October 4, 2020. REUTERS/Henry Nicholls//File Photo
 
CINE
-4.09%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Yadarisa Shabong

(Reuters) -Britain's Cineworld on Friday painted a bleak picture for cinema operators, forecasting admissions would remain below pre-pandemic levels in the next two years as the Regal chain owner tries to fix its finances under bankruptcy protection.

The world's second-largest movie theatre operator behind AMC Entertainment filed for U.S. bankruptcy earlier in September to try to restructure its debt and strengthen its balance sheet as low cinema attendance and a scarcity of blockbuster movies left a gaping hole in its finances.

Third quarter admissions were below expectations but the release of big-budget movies like "Black Adam", "Black Panther: Wakanda Forever" and "Avatar: The Way of Water" could boost admissions in the fourth quarter, Cineworld said.

The number of people going to the cinemas to watch movies would stay below pre-COVID levels in the next couple of years, Cineworld forecast, as fewer mid-sized films are expected to release on the big screen.

Over the last few years, there has been a broad change in the way audiences view movies as online streaming became more popular. The pandemic, which forced cinemas to close, accelerated that shift.

But while the industry struggles, Cineworld's specific issue is the amount of debt it has amassed.

It took on debt to fund its $3.6 billion purchase of Regal Entertainment in 2017 and more to survive the pandemic. Cineworld also faces damage claims after it scrapped a $1.65 billion takeover of Canada's Cineplex.

Net debt stood at $8.81 billion at June 30, including lease liabilities, compared with $8.9 billion at the end of December, while cash reserves had declined to $131 million from $354 million over the same period.

Lenders have given the company access to $785 million of $1.94 billion debtor-in-possession financing as part of the bankruptcy protection.

Cineworld has also faced discontent from shareholders over executive pay in 2021, including bonuses to chief executive Mooky Greidinger and his brother and deputy chief Israel.

The company reported a loss before tax of $364.9 million for the six months to June 30, compared with a loss of $576.4 million a year earlier.

Admissions in the period were nearly 83 million, about 61% of pre-pandemic levels. However, ticket prices and the amount spent per person in theatres surpassed 2019 levels.

Struggling Cineworld paints bleak picture for cinemas
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email