/https://specials-images.forbesimg.com/imageserve/5f6c7253202535ece3d1c552/0x0.jpg?cropX1=0&cropX2=4444&cropY1=225&cropY2=2726&w=1200&resize=1200,675&ssl=1 "Cineworld Warns Of Impact Of New Lockdowns After Posting .6 Billion Loss")
Topline
Cineworld, one of the world’s biggest movie theatre chains that has been badly hit by coronavirus restrictions, has warned that it may need to raise more money if governments reintroduce strict lockdowns, as the company swung to a $1.6 billion loss in the first half of 2020.
COVID-19 notices at a Cineworld cinema in Leicester Square on August 9, 2020 in London, England
Getty Images
Key Facts
The firm’s pre-tax losses in the six months to June contrast sharply with pre-tax profits of $140 million in the same period last year.
Cinema closures also saw revenues slump to $712 million, compared with $2.1 billion in the first half of 2019.
Cineworld’s latest results come as the chain, the second largest in the world, was forced to close 778 theatres across the U.S., the U.K., Europe and Israel in March.
The group has since reopened the majority of theatres, 561, in the U.S. (operating as Regal Cinemas) and the U.K. at the end of July, after coronavirus restrictions were gradually lifted.
“There can be no certainty as to the future impact of COVID-19 on the Group,” Cineworld said in a statement.
Big Number
Cineworld’s share price was down more than 13% on Thursday morning.
Crucial Comment
Cineworld’s statement continued: “If Governments were to strengthen
restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity.”
Key Background
Cinemas have been one of the businesses worst hit by the pandemic, and lockdown measures meant to enforce social distancing. Several blockbuster releases around the world have been delayed for months, most recently Disney’s Black Widow while cinemas have remained shut or operating at limited capacity. Accounting giant PwC estimates that the global cinema industry will see a 66% drop in revenue this year, to $15.5 billion. Cineworld said it hopes to see its biggest markets in the U.S., California and New York, reopen “in the near future”.
Surprising Fact
The movie theatre giant said that despite the pandemic’s adverse effect on its latest results, it was boosted by the performance of Christopher Nolan’s Tenet. The action thriller has pulled in some $251 million around the world, to date.
Tangent
In a sign of the impending tough period, Cineworld reportedly laid off 240 of its U.K. staff, part of its 37,000-strong global workforce, in March.
Further Reading
Interim Results for the period ended 30 June 2020 (Cineworld)
Disney Pushes Back ‘Black Widow’ Release Again Amid Low Movie Theater Turnout (Forbes)
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