Cineworld has massive financial downturn due to theater closures caused by coronavirus
The company lost millions in the six-month period since theaters began to close
Cineworld, one of the nation's leading theater chains, has taken a massive hit financially amid the coronavirus pandemic.
The chain, which owns Regal in the United States, revealed that its group revenue fell $712.4 million from $2.1 billion in 2019 in the period that ended in June 2020, according to Deadline.
The outlet reports that group adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell $53 million from $758.6 million the previous year as admissions fell from 136 million to a staggeringly low 47.5 million in the wake of theater closures throughout the world to help curtail the spread of COVID-19.
Cineworld now faces a pre-tax loss of $1.6 billion, a stark contrast to the $139.7 million profit it had in 2019. The outlet reports that the company acknowledged what it called the “severe impact” of theater closures, noting that almost all sites were closed between mid-March and August due to the pandemic. Currently, only 561 of its 778 sites are open with 200 theaters in the U.S. in key markets like California and New York shut down.
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It wasn’t all bad news from Cineworld, which noted that it raised $360.8 million in liquidity during the period of stress and that negotiations with banks are ongoing to cushion further blows expected in December and January.
FILE - A Regal Cinemas movie theater is temporarily closed during the coronavirus pandemic in New York on May 5, 2020. (AP Photo/Ted Shaffrey, File)
As theaters around the country slowly reopen, they do so cautiously out of fear of a second wave of the outbreak. Meanwhile, studios continue to pull back on letting major tentpoles hit theaters for fear that audience engagement will be too low to make it worth their while.
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Disney announced on Wednesday that highly anticipated blockbusters such as “Black Widow” and “West Side Story” will have their release dates pushed back deep into 2021. But the delays of Disney’s upcoming blockbusters reinforce the growing exodus from 2020 among the blockbusters that hadn’t already uprooted to next year.
Following tepid ticket sales for Warner Bros.′ “Tenet” in a U.S. theatrical marketplace where about 30% of cinemas remain closed, Warner Bros.′ “Wonder Woman 1984” moved from October to Christmas and Universal Pictures’ “Candyman” postponed to next year.
The Associated Press contributed to this report.