Cineworld movie channel struggles to survive pandemic

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The world’s second-largest film company said Thursday it had enough funds to continue operating for now after falling to a loss of $ 1.6 billion for the first six months of the year while income had fallen 67%.

The company has warned, however, that it will need to raise additional cash early next year if a second wave of coronavirus cases causes “extended” shutdowns in the United States and the United Kingdom.

Even if this scenario is avoided, the company said it was likely to breach loan covenants in December and again in June 2021, which would put it at risk of default if talks with its lenders fail. to exemptions.

“There can be no certainty about the future impact of Covid-19 on the group,” Cineworld said in a statement.

Shares of the company fell more than 10% in London on Thursday.The financial results also included a warning from the company’s auditor, PwC, that it had not obtained “sufficient and appropriate evidence as to whether the waivers could be obtained or whether additional funds could be obtained.” if necessary ”.

PwC said it was therefore unable to conclude that the company would be able to continue operating for the foreseeable future.

“The lack of waivers and the short-term uncertainty resulting from the current Covid-19 situation represent significant uncertainties which are too serious for us to express a conclusion on the interim financial statements,” added the auditor.

Cineworld said it has reopened 561 of its 778 theaters so far. Of those that remain closed, 200 are located in the United States, 11 in Israel and six in the United Kingdom.

PwC said the company was particularly “sensitive to the possibility of opening the remaining theaters in New York and California by the end of October, and further delays in the list of films currently planned.”

Theater closures lowered revenues in the first six months of 2020 to $ 712 million, from $ 2.2 billion the year before.

Another problem for the industry is the shortage of blockbuster films.

The box office was anemic with films like “Tenet,” “The New Mutants” and “Unhinged” being the only notable new films to play in theaters. Wednesday, Disney (DIS) has announced that it will delay the US release of “Black Widow,” a highly anticipated superhero film starring Scarlett Johansson, from November to May 7, 2021.

– Frank Pallotta and Hanna Ziady contributed reporting.

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