AMC issues ‘going concern’ warning, Cinemark predicts problems through 2022

AMC issues 'going concern' warning, Cinemark predicts problems through 2022

Two large movie theater owners issued warnings on Wednesday about their ability to recover from the coronavirus.

AMC, the country’s largest cinema chain, said in a regulatory document that there is “substantial doubt” about its ability to “continue as a going concern for a reasonable period of time.” Companies issue “going concern” warnings when they are running out of cash and AMC has been haunted by persistent bankruptcy rumors since it was forced to close 630 theaters across the country in March.

“We are not effectively generating revenue,” the presentation said. AMC expects to have a first-quarter loss of up to $ 2.4 billion, as revenue fell 22 percent to $ 941.5 million, he added.

The company says its $ 718.3 million cash balance will be enough to keep it until the end of summer, but warned that its business problems could persist even after requests to stay home are lifted, as Hollywood studios also they have been forced to back down. production and delay the release of films.

Mark Zoradi, executive director of rival cinema chain Cinemark, expressed similar concerns, saying he doesn’t expect the industry to return to normal until 2022.

“The reality is that I don’t think we can go back to having a full rhythm of product cycles and everything we had before COVID-19 through 2022,” Zoradi said in the first quarter. Earnings call with analysts. “That is more related to production than to our operation because, as the studios have had to adapt to not being able to film and perform post-production, they have had to change their schedules.” So we’re also going to adapt. “

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In addition to a new deep cleaning program, Cinemark plans to limit its seating capacity to 50 percent in each of its 525 theaters, with six feet between clients for social distancing. The CEO, who said he expects the chain to begin reopening on July 1, said Cinemark could still be profitable by operating at that level.

However, during the first quarter, Cinemark posted a loss of $ 59.6 million, or 51 cents a share, compared to a profit of $ 32.7 million, or 28 cents a share, a year earlier. Adjusted earnings totaled $ 66.2 million. Revenue fell 24 percent from $ 714.7 million to $ 543.6 million.

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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