AMC Theaters Expected to Fully Open Next Month But With Massive Q:1 Losses
Over the past few months we here at MickeyBlog have spoken alot about the uncertainty looming over the longevity of AMC one of the worlds largest cinema chains. The company has been vocal about the crippling effects of COVID-19 on their business including $2.18 billion in net losses. However, the company is focused on opening their cinemas worldwide next month and investors are watching.
In a Q:1 earnings report, revenue for the company dropped 22% to $941 million down from $1.2 billion. Though the losses seem staggering, DEADLINE points out that it is at the lower end of the range the company had predicted of between $2.1 and $2.4 billion in losses.
This news makes the fact the company is celebrating its 100 year anniversary rather bittersweet. At certain times over the last few months investors feared that the company wouldn’t have enough cash to keep operating and that filing for Chapter 11 bankruptcy was imminent. The company itself added to the uncertainty by being transparent and saying they weren’t sure if they would be able to continue.
However, if there’s a silver lining to be found in all of this it’s that the company has been successfully negotiating with landlords around the world to get rent forgiven and converting rent from a fixed-price model to one that is based on a percentage of the company’s revenue. According to DEADLINE, the company has also been working with studios, vendors and other business partners to defer cash costs when theater operations came to a halt.
AMC has said that they will be aiming to open most of their theaters in the United States and United Kingdom by July. This will be done in conjunction with Warner Bros’ release of Christopher Nolan’s Tenet scheduled for a July 17th released as well as Disney’s Mulan which is slated to come out on July 24th. Theaters in Norway, Spain, Portugal, and Germany are expected to open next month as well.
Moody’s and S&P downgraded the company’s credit rating in response to the company’s strategy of using a distressed debt swap which the agencies said points to a default. However, since then stocks have actually seemed to rally a bit with the news that the cinemas will reopen this summer.
This is a story that we’ll continue to follow closely here at MickeyBlog so keep checking in for the latest news and updates.
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