The leading trade fair chain Cineworld, which belongs to Regal in the USA, has inevitably presented gloomy interim results for the half-year period ending June 30, 2020.
Consolidated revenue declined to $ 712.4 million from $ 2.1 billion in 2019, and EBITDA (earnings before interest, taxes, depreciation, and amortization) fell from $ 758.6 million in 2019 to 53 Million USD. The approvals fell from 136 million to 47.5 million.
Cineworld recognized the “serious effects” of cinema closures.
All locations in the group were closed between mid-March and the end of June to August due to the pandemic. Currently, 561 of 778 locations are reopening, with 200 theaters still closed in the US (mostly California and New York), six in the UK and eleven in Israel.
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The group raised $ 360.8 million in additional liquidity during the period and said negotiations with banks were ongoing to secure a covenant waiver for December 2020 and June 2021. The termination of the Cineplex transaction was also established.
The company said there are some positive signs on the horizon from “the steady performance of reopened locations in ROW areas and building initial registrations in the UK and US due to the release of tenet and local films”.
However, given the delay in many tent poles and the tightening of restrictions by countries in the face of the second wave of coronavirus, the company warned of additional challenges: “There can be no certainty about the future impact of COVID-19 on the group. If governments tightened restrictions on social gatherings, potentially forcing us to close our property again or further reduce film releases, it would have a negative impact on our financial performance and would likely require the need to raise additional liquidity. In our going concern statement in this document, we have highlighted the potential impact this could have on the Group. “
Mooky Greidinger, CEO of the Cineworld Group, commented: “Despite the difficult events of the past few months, we were delighted with the return of global audiences to our cinemas towards the end of the first half of the year, as well as the positive customer feedback we received from those who patiently responded have waited to see a movie back on the big screen.
“The impact of COVID-19 on our business and the entire leisure industry has been significant as all of our cinemas worldwide have been closed for extended periods of time. During this unprecedented time, our priority has been to ensure the safety and health of our customers and employees while saving cash and protecting our bottom line. Our damage mitigation measures included reducing and postponing costs where possible. Use of government support programs for our employees; Delay some capital investments; and suspension of our dividend. We also raised an additional $ 360.8 million in liquidity to support our business.
“The current trade has been encouraging given the circumstances and supports our belief that there continues to be a significant difference between watching a movie in a cinema – with quality screens and great sounds – and watching it at home. As part of this, our policy on the cinema window as an important part of our business model remains unchanged and we will continue to only show films that respect it. While great uncertainty remains, we have a dedicated and experienced team focused on managing business continuity while capitalizing on the strong plan currently being planned for the coming months. “