Multiplex giant Cineworld Group’s half-year results have been severely impacted by the ongoing global coronavirus pandemic, as expected.
All cinemas remained shuttered from mid-March to late June or early August in some cases. Consequently, group revenue plummeted to $712.4 million from 2019’s $2.1 billion and group adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell to $53 million from 2019’s $758.6 million.
The company has made clear that there is no certainty around its COVID-19 outlook. In a forward-looking statement, Cineworld said, “If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity.”
The group raised additional liquidity of $360.8 million during this period. The group said that 561 out of 778 sites are now re-opened, though 200 theaters in the U.S. (mostly in California and New York), six in the U.K. and 11 in Israel are still closed. The steady increase in theatrical business is attributed to Warner Bros. release “Tenet,” and local titles, the group said.
“The impact of COVID-19 on our business and the wider leisure industry has been substantial, with the closures of all of our cinemas worldwide for an extended period,” said Cineworld group CEO Mooky Greidinger. “During this unprecedented time, our priority has been the safety and health of our customers and employees, while at the same time preserving cash and protecting our balance sheet.”
The CEO said “mitigating actions” included reducing and deferring costs where possible; making use of government support schemes for employees; partially delaying capital investments; and suspending Cineworld’s dividend.
“Current trading has been encouraging considering the circumstances, further underpinning our belief that there remains a significant difference between watching a movie in a cinema — with high quality screens and best-in-class sounds — to watching it at home,” Greidinger added.
“As part of this, our policy regarding the theatrical window remains unchanged as an important part of our business model, and we will continue to only show movies that respect it. While there continues to be a lot of uncertainty, we have a dedicated and experienced team that is focused on managing business continuity while taking advantage of the strong slate currently planned for the months ahead.”
More to come.