China’s largest cinema chain operator Wanda Film said Tuesday that it anticipates reporting a net loss of between $214 and $228 million (RMB 1.5 to RMB1.6 billion) in the first half of the year. China’s cinemas have been shut for almost that entire time due to COVID-19.
In contrast, the firm saw a net profit of $75 million (RMB 524 million) during the same period last year.
“All of the more than 600 cinemas of Wanda Film in China have been closed since Jan. 23, and the ones overseas also suspended business after the end of March,” the Shenzhen-listed firm said in a stock exchange filing. It added that “operating income dropped by a big margin compared with the same period last year” due to fixed costs such as salaries and rent, noting also that coronavirus has delayed its shooting of TV dramas.
Wanda Film runs more than 600 cinema complexes across 230 Chinese cities — 73 of them opened just last year — as well as 53 multiplexes overseas, primarily in Australia and New Zealand.
Cinemas in China have been closed since late January as a measure to stem the spread of the virus. Re-openings are rumored to start at the end of this month, with the Shanghai International Film Festival even preparing to take place in-person at the end up the month, but no official notices to that end have emerged yet.
Wanda Film’s blockbuster “Detective Chinatown 3” was supposed to opened in theaters just as cinemas closed over the Chinese New Year. Its release has been indefinitely postponed.
The China Film Administration predicted in April that these coronavirus-induced shutdowns will mean Chinese box office losses of more than $4 billion this year.
Such headwinds haven’t stopped Wanda Film from its dreams of further expansion. In May, the firm announced plans to build 162 more multiplexes over the next three years — with 50 to 70 of them going up by the end of 2020.
Despite the news of its expected losses, Wanda Film’s stock price has been rising throughout July on the back of investor anticipation of cinemas reopening in China. It rose 7.9% on Tuesday to close at a price of RMB20.81 per share, but tumbled by 4.5% on Wednesday morning to RMB19.9.