Cineworld says it may need to raise cash after $1.6bn loss
CINEWORLD has warned that it may need to shore up its finances after plunging to a massive half-year loss.
The FTSE 250 company reported a $1.6bn (£1.3bn) pre-tax loss for the six months to June after being forced to shut most of its theatres from mid-March to August due to the pandemic. It made a profit of $139.7m for the same period last year.
Revenues plunged by two thirds to $712m after ticket sales slumped from 136m to 45m.
The world’s second largest cinema chain said uncertainties around a second wave of Covid, leading to a prolonged recovery for the industry, meant that the future of the company could be at risk.
Cineworld said “lack of clarity on the cinema industry’s recovery represented uncertainties about the group’s ability to continue as a going concern”. Under a “severe but plausible downside scenario”, the company said it would need additional financial facilities to continue operating from early 2021.
However, it expected lenders to grant necessary waivers on its loans.
Cineworld has reopened almost three quarters of its 778 sites, but 200 in the US remain closed.
Cineworld has had a torrid few months, in which it walked away from plans to snap up Canadian rival Cineplex for $1.6bn, citing virus-related concerns. The pair are now suing each other.
It has also faced legal action over unpaid rent.
Chief executive Mooky Greidinger said: “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-inclass sounds – to watching it at home.”
Cineworld had net debt of £8.2bn at the end of June.
Shares closed down nearly 15pc at 41.4p.