Cineworld reported a profit for the first half of 2022, but ticket sales fell below expectations for the troubled theater chain, leading the British owners of Regal Cinemas to predict that admissions would stay below pre-pandemic levels for the next two years.
Admissions at the world’s second-largest movie theater chain in the first six months of the year ended June 30 and reached 82.8 million attendees – a significant leap from the pandemic-compromised 14.1 million in 2021, but only about 61% of pre-Covid levels, the chain said in a statement. The results led the company to forecast that “cinema admissions in both FY23 and FY24 are expected to remain below pre-pandemic levels.”
Upcoming blockbusters like “Black Adam,” “Black Panther: Wakanda Forever” and “Avatar: The Way of Water” may draw some reluctant fans back to the cinema in the last few months of this year, Cineworld said, noting that summer flicks like “Top Gun: Maverick” and “Doctor Strange in the Multiverse of Madness” did draw audiences.
“This has been a challenging period for Cineworld due to the unprecedented impact of the Covid-19 pandemic on our business and its lagging and continuing disruption to film schedules.”Cineworld Group CEO Mooky Greidinger
One bright spot in the report noted that ticket prices and the amount spent per person at the theaters topped 2019 levels. Revenue for the first six months rose to $1.51 billion, from $293 million during the COVID-complicated first half of 2021. Operating profit came in at $57.3 million, reversing last year’s loss of $209 million.
The struggling chain, which filed for bankruptcy in the U.S. earlier this month, also revealed how much debt it has piled up — $8.81 billion as of June 30, down slightly from $8.9 billion at the end of December, Reuters reported. That includes debt taken on to fund its $3.6 billion purchase of Regal in 2017, and additional loans inked to help the chain through the pandemic, when theaters were shuttered for months.
Cash reserves during the period slumped 60% to $131 million, from $354 million. The company said the “general tightening of the group’s overall liquidity position” reflected the lower admissions.
Cineworld can access up to $785 million of credit provided by lenders as part of the bankruptcy proceedings, which can be used to fund operations.
“This has been a challenging period for Cineworld due to the unprecedented impact of the Covid-19 pandemic on our business and its lagging and continuing disruption to film schedules,” CEO Mooky Greidinger said in a statement.