Cineworld Loses £1 Billion Due To COVID-19

The world’s second-largest cinema chain and the UK’s biggest cinema operator, Cineworld issued a stark warning today announcing its figures for the first half of 2020.

And the outlook is this, Cineworld cannot survive a second lockdown.

The Guardian reports, “[the company has been] encouraged since the reopening of most of its screens, it might need to raise more money in the event that any future government restrictions forced further closures.”

Further UK Lockdowns Would Be Fatal For Cineworld

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Here’s the statement issued by Cineworld about COVID-19’s effect of its business:

There can be no certainty as to the future impact of COVID-19 on the group. If governments were to strengthen restrictions on social gathering, which may therefore oblige 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.

Cineworld closed 778 sites during the early stages of the pandemic, with 561 reopened since July. 6 of the UK sites remain closed.

They also operate the Picturehouse brand in the UK.

For a firm that already raised £283 million in aid in the first 6 months, it’s not looking good for the year ahead as they already sit on £8.2bn of debt.

Shares have dropped 11% since the news broke.

This is the largest fall on the FTSE for the day so far.

As we exclusively announced yesterday, Disney has pulled all major releases for the UK in October/November, Warner’s Pulled Wonder Woman till Christmas Day.

Big Noise In The Media

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Cineworld caught instant fire from the media in March for announcing mass layoffs before the furlough scheme was introduced.

Cineworld CEO Mooky Greidinger didn’t help matters by guffawing his way with Deadline into stating it was all a misunderstanding, a ‘”big noise in the media” and they actually were “taking care of our employees’”.

For a company that it 2019 reported $4,369 million in revenue last year, that’s was a bitter pill for the staff to swallow back in March 2020.

So, amongst being hit with losing a billion, to Disney pulling support and with James Bond being the only release between now and Christmas with any real blockbuster power… it’s troubling times for all operators.

Cineworld’s Days could be well be numbered

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Michael Hewson senior analyst at CMC Markets “Cineworld’s days could well be numbered. Their only hope now is the prospect of a takeover bid from a big Hollywood Studio or significant restructuring of the business” if fortunes don’t change soon.

What do you make of this news?

Are you worried about the future of Cineworld and other cinemas in the UK and the rest of the world?

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