Beleaguered cinema chain Cineworld, which recently commenced Chapter 11 proceedings in a Texas bankruptcy court, has revealed interim financial results for the period ended June 30, 2022, and the overall picture is not rosy.
While the company’s revenue for the first six months of 2022 rose to $1.51 billion, from $293 million during the same period in COVID-hit 2021, operating profit rose to $57.3 million from last year’s loss of $209 million and losses before tax shrank to $365 million from $576 million, cash at hand was also down to $131 million in June from $354 million at the end of 2021. The group owns Regal Cinemas in the U.S. and operates in 10 countries.
Thanks to cinemas remaining open uninterruptedly, admissions soared to 82.8 million from 14.1 million in 2021. However, “Q3 admissions have been below expectations,” Cineworld said in a statement, adding that “cinema admissions in both FY23 and FY24 are expected to remain below pre-pandemic levels.”
“While monthly admission levels progressively recovered in the first half of 2022, they remained below both pre-pandemic levels and the group’s original forecast for 2022. This led to a general tightening of the group’s overall liquidity position,” the statement added. “The group has reviewed and revised down its short and medium-term cinema admission forecasts. The review was prompted by the slower-than-expected recovery being experienced in 2022 combined with external forecasts indicating a lower volume of theatrical releases in 2023 and 2024.”
Mooky Greidinger, CEO of Cineworld Group, said: “This has been a challenging period for Cineworld due to the unprecedented impact of the COVID-19 pandemic on our business and its lagging and continuing disruption to film 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. The performance of key blockbusters in the first half, including ‘Top Gun: Maverick’; ‘Doctor Strange in the Multiverse of Madness’; ‘Jurassic World Dominion’; ‘The Batman’, illustrates the continued demand for such special cinematic experiences.
Despite these encouraging signs and a highly anticipated slate of movies later this year, we needed to strengthen our balance sheet and liquidity position after the deep and unprecedented impact of COVID-19. We therefore commenced a Chapter 11 restructuring process in the US to implement a de‐leveraging transaction that will provide the financial strength and flexibility to accelerate and capitalize on, Cineworld’s strategy.”
In the short term, Cineworld has received approval from the U.S. Bankruptcy Court for “first day” relief related to its Chapter 11 proceedings, granting the group immediate access to up to some $785 million of an approximate $1.94 billion debtor-in-possession financing facility that, together with its cash reserves and cash provided by operations, is expected to provide temporary liquidity.