AMC posts loss as theatres slowly reopen
Could burn through cash by year’s end
AMC Entertainment Holdings Inc. reported another steep quarterly loss, hurt by a drought in new movie releases and scant few film fans in its theatres because of the coronavirus. But the company continues to reopen theatres and said earlier Monday that it’s seeking to sell about US$ 48 million in new stock after previously warning it could run out of cash by the end of the year.
The world’s largest theatre chain reported a loss of US$ 905.8 million, or US$8.41 a share, for the third quarter. Revenue tumbled to US$ 119.5 million from almost US$ 1.32 billion a year ago.
While AMC has reopened about 540 of its 600 locations, the chain has had to observe social- distancing guidelines that mean it can only partially fill auditoriums, even if fans were willing to turn out in large numbers during a pandemic.
Against that backdrop, Hollywood studios are mostly withholding potential blockbusters that could reignite interest in visiting theatres. The next major film expected to première is Warner Bros.’ Wonder Woman 1984 on Christmas Day.
AMC has warned it could run out of cash by the end of the year or early next year. To raise cash, it’s offering as many as 20 million shares of stock, 5 million more than it had proposed a couple of weeks ago. It also warned shareholders in October that bankruptcy was a possibility.
Since March, the company has raised about US$ 900 million from new debt and equity, secured more than US$ 1 billion of concessions from creditors and landlords, and raised more than US$ 80 million from asset sales. The company said it has benefited from an agreement with Universal Pictures, in which the studio’s films can be sold online for US$ 20 a mere 17 days after premièring in AMC’S cinemas. Normally, movies stay on cinema screens exclusively for up to 90 days. In exchange, AMC gets a cut of online sales.
AMC shares rose as much as 3.3 per cent in late trading before retreating somewhat. The stock slumped 8.9 per cent during the regular session and is down more than 70 per cent this year.
AMC said on Oct. 27 it plans to reopen eight theatres in California, one of its key markets. It said that it would reopen theatres in Northern California, including San Francisco and the greater Bay Area.