Cineworld raises doubts about its future after £1.3bn loss during lockdown
Cinema chain warns it may need further cash injection to survive more Covid-19 restrictions
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Cineworld has raised doubts about its ability to survive a second coronavirus lockdown after revealing a $1.6bn (£1.3bn) loss in the first half of the year.
The cinema chain swung to a loss from a profit of $140m a year ago as revenues plummeted after lockdowns forced screens to close.
But Cineworld said current trading has been “encouraging considering the circumstances”, with solid demand for action-thriller and spy film Tenet released earlier this month.
The chain said it was still in talks with lenders over breathing space for upcoming banking agreements, while warning about the potential need to boost finances again if it had to close its cinemas or if film releases were pushed back.
Cineworld warned: “There can be no certainty as to the future impact of Covid-19 on the group.
“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 said 561 of its 778 sites worldwide have reopened, with 200 cinemas in the US, six in the UK and 11 in Israel still closed.
Cineworld said if the cinemas that are still closed in the US do not open before the end of October, or there are further delays to the release of significant films in 2021, then extra financing would be needed.
In a “severe but plausible scenario”, where a second wave of the pandemic caused further lengthy cinemas closures, then it would breach banking agreements in December and June 2021 and need further financing to continue to operate from early next year.
Cineworld has already raised an extra $361m to help it weather the crisis so far.
Chief executive Mooky Greidinger said: “Despite the difficult events of the last few months, we have been delighted by the return of global audiences to our cinemas toward the end of the first half, as well as by the positive customer feedback we have received from those that have waited patiently to see a movie on the big screen again.”
He added: “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.”
In May, Cineworld pulled out of a CA $28bn (£1.6bn) deal to buy Canada’s biggest chain Cineplex, which would have created the biggest chain of cinemas in North America.
PA
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments