Cineworld Warns Admissions Will Not Surpass Pre-COVID Levels in 2023 and 2024
By Scott Kanowsky
Investing.com -- Cineworld Group (LON: CINE ) warned that it expects admissions will remain under pre-pandemic levels over the next two years despite a recent resurgence in six-month ticket sales, heaping further pressure on to the ailing movie theater chain after it filed for bankruptcy protection earlier this month.
In a statement in the British company's half-year results on Friday, chief executive officer Mooky Greidinger described the current trading environment as "challenging," citing the widespread impact of the COVID-19 crisis on moviegoer demand and film release schedules.
"Covid-19 continued to weigh on our trading during the half-year, although we have been encouraged by the gradual ongoing recovery in our performance over recent months - as pandemic restrictions ended, guests returned for popular movies," Greidinger said, referring to recent blockbusters like "Top Gun: Maverick" and "The Batman."
Revenue for the six months to June 30 jumped by 417% year-on-year to just under $1.52B, thanks to a nearly six-fold increase in admissions. The company's loss before tax shrank in turn to $365.9M from $576.4M.
Cineworld flagged that sales in the third quarter have so far come in below pre-crisis figures, but added that it is optimistic that big upcoming releases like "Black Adam" and "Avatar: The Way of Water" will boost returns in the final three months of 2022.
However, the world's second largest cinema group said admissions in both its 2023 and 2024 fiscal years will not surpass numbers seen before COVID lockdowns that upended the business and threatened its overall liquidity position.
Cineworld filed for bankruptcy protection on September 7 in a U.S. court in a bid to decrease its massive debt pile. The firm plans to keep operations running "as usual" during the process, while also pledging to strengthen its balance and "provide the financial strength and flexibility to accelerate, and capitalize on, the Group's strategy in the cinema industry."
Meanwhile, Cineworld was granted access to a $785M tranche of a debtor-in-possession financing facility worth about $1.94B, which it said would help it secure short-term liquidity, meet its obligations to vendors and suppliers, and pay employee wages. The rest of the funds will become available "upon court approval on a final basis," the company said.
Shares in Cineworld were in the red in mid-morning trading.
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