After three months of near-total blackout of cinemas nationwide, movie theaters are preparing to reopen, even if it's only a few titles on the marquee and showings limited to as little as 25% capacity. The National Association of Theater Owners, the trade group that represents exhibitors, expects some 90-95% of cinemas around the world will be opened by mid-July.
AMC Entertainment, for example, said it expects to have 97-98% of its theaters worldwide reopened by mid-July. has provided investors a sneak peek on Tuesday of the negative impact the ongoing novel coronavirus pandemic has had on the cinema chain, reporting a net loss of USD 2.2 billion for the first quarter, which ended March 31. The loss equates to roughly a loss of USD 20.88 per share, compared with the USD 1.25 per-share loss the company reported during the same quarter a year ago when losses totaled USD 130 million. “These are truly unprecedented times. I join with all our employees around the world to offer our sympathies to those affected by the coronavirus, as well as our sincerest gratitude to those on the front lines,” AMC CEO Adam Aron said in a statement. “After starting the year with two solid months of revenue growth compared to last year, in mid-March, we were forced to pivot the entire company to respond to the effects of the pandemic.”
Analysts tracking the stock initially expected AMC to report a per-share loss of USD 1.52. The company’s adjusted net loss per share was USD 2.22. The company’s revenue for the quarter was USD 941.5 million, compared with USD 1.2 billion a year ago. Analysts had forecast AMC would report revenue of USD 951.4 million. In the first quarter admissions revenue was down to USD 568 million, from USD 731.5 million a year ago, while food and beverage revenue fell to USD 288.1 million, from USD 368.8 million. During the three months, AMC drew down approximately USD 325 million under existing revolving credit facilities, and in April issued USD 500 million of 10.5% first-lien notes due 2025. The chain said in its release on Tuesday that managing its liquidity is the company’s top priority. AMC’s free cash flow in the quarter was negative USD 275.7 million.
AMC, along with all other theater chains in the U.S., was forced to shut down all its theaters in mid-March as a result of the pandemic. Experts question the financial viability of the theater chain after the shutdown. Aron said in a statement that he is “confident we are taking the necessary steps on a broad array of fronts to ensure AMC’s future success as we navigate these turbulent and uncertain times.” AMC has already reopened 10 of its theaters in Norway, Germany, Spain, and Portugal, and currently expect to be fully open globally in July.
Theaters have slowly been reopening in other areas of the country, while a renaissance of drive-ins has flourished. Cinemark, which operates about 6,000 U.S. screens has said it will begin reopening in late June and fully reopen by 10th July. Cineworld, which owns Regal Cinemas, the world’s second-largest chain, is also tracking for a July reopening. “After a period of time where billions of people have endured confinement and limited social interaction, we believe that there will be a significant pent-up demand to get back out in the world,” said Aron. “Having said that, we’re under no illusions. The waters will be choppy. There may be unforeseen tosses and turns to be navigated through. And full recovery may take quite a while.”