Cineworld says it may need to raise cash af­ter $1.6bn loss

The Daily Telegraph - Business - - Business - By Si­mon Foy

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.

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