Despite the elimination of Covid-related limitations, Cineworld Group reports that ticket sales have not recovered as quickly as predicted.
Due to the debut of the Omicron variation and the dearth of major new blockbuster films, the struggling cinema chain reported that demand in the United States, its largest market, began the year slowly.
As lockdowns were released, admissions increased substantially, skyrocketing 487% to 82.8 million in the first half of 2022, but this was still roughly 40% below pre-pandemic levels.
Cineworld is now issuing a warning that it anticipates total admissions to remain below 2019 levels for the following two fiscal years, in part because external predictions indicate a decrease in the number of theatrical releases.
Cinema operators have struggled in recent years due to a lack of audience numbers and forced closures, as well as rising competition from popular streaming services such as Netflix and Amazon Prime.
Cineworld’s debt-laden £2.7billion 2017 acquisition of American operator Regal Entertainment, which gave it the world’s second-largest theatre chain, has compounded its financial woes.
Batman, Top Gun: Maverick, and Doctor Strange in the Multiverse of Madness provided a much-needed financial boost.
As a result, the company’s revenues increased by 417 percent to more than $1.5 billion, while its post-tax losses decreased by 43 percent to $293,8 million.
However, the weaker-than-anticipated comeback in demand resulted in the company losing an additional $144.9 million in cash and lowering its near- and medium-term projections.
It filed for bankruptcy in the United States three weeks ago to undergo a reorganization, reduce its large debt load, and gain access to near-term financing.
Alicja Kornasiewicz, the chairwoman of Cineworld Group, stated, ‘The lingering effects of the Covid-19 outbreak contributed to our continued financial and liquidity challenges.
This prompted us to initiate a Chapter 11 reorganization in the United States, which aims to build a more efficient firm and a stronger capital structure to better position Cineworld for the future.
Black Adam, the superhero film Black Panther: Wakanda Forever, and the action-adventure epic Avatar: The Way of Water is among the blockbuster winter releases that the London-listed company expects to contribute to a good fourth quarter.
Nonetheless, eToro analyst Adam Vettese stated, “the curtain may well be going down” for Cineworld in light of the cost-of-living crisis and streaming competition.
He continued, “The epidemic was only a wake-up call for customers who had already begun to alter their movie-viewing habits.” The cinema, like other obsolete media technologies such as the video cassette and DVD, appears to be circling the drain.
In late morning trading on Friday, Cineworld Group shares fell 4.8% to 2.95 pence. Since the beginning of 2022, their value has decreased by approximately 90%.
