Admissions will remain below pre-pandemic levels in 2023 and 2024 – The Hollywood Reporter
Exhibition giant and Regal owner Cineworld Group, which recently filed for Chapter 11 bankruptcy in the United States, predicted on Friday that cinema admissions in 2023 and 2024 would remain below levels recorded before the COVID-19 pandemic.
Third quarter admissions were “below expectations” with fourth quarter “expected to be stronger, supported by the planned release of black adam, Black Panther: Wakanda Forever, Avatar: The Way of the Water and other blockbuster movies,” the second-largest movie theater chain said in an update on its first-half 2022 financials. 2024 should remain below pre-pandemic levels.”
Cineworld said it had “revised downwards its near to mid-term cinema admission forecast”, explaining that “the review was driven by the slower-than-expected recovery in 2022, combined with external forecasts indicating a decline the volume of theatrical releases in 2023 and 2024.”
In March, it disclosed a “baseline scenario”, in which it projected admissions “to remain on average 5% below 2019 levels throughout 2023 and recover to 2019 levels in 2024”.
Cineworld shared its updated guidance on Friday as it reported a revenue gain for the first half of 2022 and a return to operating profit, helped by “steadily rising admission levels and high average ticket prices and per capita expenditure”. Admissions for the January-June period reached 82.8 million, compared to 14.1 million for the same period of 2021, which included “a period of temporary closures from January to April/May 2021 due to COVID-19 restrictions and (a) slate limited movie.”
The company said Friday that its revenue for the first six months of 2022 was nearly $1.52 billion, while revenue for the same period in 2021 was just $292.8 million.
Cineworld posted operating profit for the six months of $57.3 million, compared with a loss of $208.9 million a year ago. Its pre-tax net loss of $364.9 million was down from a loss of $576.4 million for the same period in 2021.
Cineworld’s net debt as of June 30, 2022 was $8.807 billion, compared to $8.435 billion as of June 30, 2021 and $8.877 billion as of December 31, 2021. The company said it had $131 million in cash as of end of June, compared to $354 million at the end of 2021.
The London-based company operates Regal cinemas in the US, as well as Cineworld and Picturehouse theaters in the UK. Overall, it operates 747 locations and 9,139 screens in 10 countries, meaning investors, Hollywood and other operators are watching its future closely.
“While monthly admission levels gradually recovered in the first half of 2022, they remained below both pre-pandemic levels and the group’s initial guidance for 2022,” Cineworld also said on Friday. “This has led to a general tightening of the group’s overall liquidity position.”
Following admissions expectations, Cineworld said it also conducted a “semi-annual impairment assessment”. In accounting, a depreciation is a permanent decrease in the value of an asset. “As a result of this assessment, it was determined that the positive difference between the recoverable amounts and the carrying values on the balance sheet had decreased significantly compared to the assessment made at December 31, 2021, but that no impairment of assets intangibles was necessary,” the firm said. . “As the year progresses, management will continue to monitor performance and reassess its short, medium and long-term guidance as appropriate. A downward revision of its long-term guidance would most likely result in a material impairment of goodwill. .
For the first six months of 2022, Cineworld announced on Friday that it had recorded impairments totaling $66.3 million, including $29.4 million related to property, plant and equipment and $16.7 million related to “right to copyright assets”. use”. Additionally, it recognized a $20.2 million impairment related to its investment in National CineMedia, which sells advertising time before movie screenings and has been “severely impacted by the COVID-19 pandemic.”
Debt-laden Cineworld, led by CEO Moshe “Mooky” Greidinger, said in an Aug. 17 statement that it was considering strategic options as it struggled to weather the summer slump for Hollywood tents at its theaters.
“COVID-19 continued to weigh on our trading during the semester, although we were encouraged by the gradual recovery of our performances over the past few months – as pandemic restrictions ended, guests returned for popular films “, said Greidinger in Cineworld’s Friday. update. “The performance of key blockbusters in the first half, including Top Gun: Maverick, Doctor Strange in the Multiverse of Madness, Jurassic World Dominion, The Batmanillustrates the continued demand for such special cinematic experiences.
But he also noted, “Despite these encouraging signs and a highly anticipated slate of films 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 begun a process of Chapter 11 restructuring in the United States to implement a deleveraging operation that will provide the financial strength and flexibility to accelerate and capitalize on Cineworld’s strategy. As we navigate this Chapter 11 process to help position Cineworld for long-term growth, we remain committed to our strategy of being “The Best Place to Watch a Movie”.
Cineworld recently said the filing of a draft plan of reorganization with the bankruptcy court would occur “in due course”, with the goal of getting out of Chapter 11 “as quickly as possible”, the company said at the time. “Cineworld currently expects to exit Chapter 11 in the first quarter of 2023 and is confident that a comprehensive financial restructuring is in the best interests of the group and its stakeholders, taken as a whole, over the long term.”