The beleaguered cinema chain Cineworld, which recently started Chapter 11 proceedings in Texas bankruptcy court, revealed interim financial results for the period ending 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 the novel coronavirus outbreak 2021, operating profit rose to $57.3 million from last year’s loss of $209 million and pre-tax losses narrowed to 365 million dollars. From $576 million, cash on hand has also decreased to $131 million in June from $354 million at the end of 2021. The group owns Regal Cinemas in the United States and operates in 10 countries.
Thanks to the uninterrupted opening of cinemas, the number of admissions increased to 82.8 million from 14.1 million in 2021. However, “Admissions in the third quarter were below expectations,” Cineworld said in a statement, adding that “admissions are expected to remain Cinema in both fiscal 2013 and fiscal 24 fell short of expectations. Pre-pandemic levels.”
The statement added: “While monthly acceptance levels gradually recovered in the first half of 2022, they remained below pre-pandemic levels and the group’s original expectations for 2022. This led to a general tightening of the group’s overall liquidity position.” The group has revised and revised its expectations for the cinema entry in the short and medium term. Reviewed by a slower-than-expected recovery that occurred in 2022 along with external expectations indicating a lower volume of theatrical releases in 2023 and 2024.”
Mooky Greidinger, CEO of Cineworld Group, said: “This has been a difficult period for Cineworld due to the unprecedented impact of the COVID-19 pandemic on our business and its continued and delayed disruption to film schedules.
COVID-19 has continued to affect our trade through the half year, although we have been encouraged by a continued gradual recovery in our performance over recent months – with pandemic restrictions ending, guests are back to watch blockbuster movies. Performing the most important films in the first half, including Top Gun: Maverick; “Doctor Strange in the Multiverse of Madness”; “The Sovereignty of the Jurassic World”; Batman illustrates the continuing demand for such special cinematic experiences.
Despite these encouraging signs and a slate of films expected later this year, we needed to strengthen our balance sheet and liquidity position following the profound and unprecedented impact of COVID-19. We have therefore initiated a Chapter 11 restructuring process in the United States to implement a lower leverage deal that will provide the financial strength and flexibility to accelerate and leverage Cineworld’s strategy.”
In the short term, Cineworld received approval from the US Bankruptcy Court for a “Day One” exemption for Chapter 11 proceedings, giving the group immediate access to up to $785 million in debtor financing facilities holding approximately $1.94 billion. which is expected to provide temporary liquidity, along with its cash and cash reserves provided by operations.
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