Cineworld has revealed the coronavirus crisis could still pose a risk to its very future.
The cinema chain, which has almost 780 sites in 10 countries, said it would be “likely” forced to bolster its balance sheet further in the event new rules force it to bring the curtain down on its global reopening or delay new releases,
The company said it was facing down several deadlines covering agreements with its banks – the first of which expires in December.
Image: Cineworld says six of its UK cinemas remain closed
Cineworld said it was continuing to negotiate waivers on the so-called covenants as it revealed a £1.3bn pre-tax loss for the six months to 30 June.
It was forced to close its entire estate from March as COVID-19 lockdowns began in its operating markets.
The company said that 561 out of its 778 cinemas had since re-opened, with only six remaining shuttered in the UK.
It pointed to particular damage in the US, including the key markets of California and New York, as 200 sites are still closed.
But it said current trading had been “encouraging considering the circumstances”, with solid demand for action-thriller and spy-fi film Tenet released earlier this month.
Image: Tom Cruise welcomes film fans back to the movies. Pic: Instagram/@TomCruise
It warned: “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 us 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.”
Shares fell 14% at the open.
The firm said it had tapped government support schemes, where available, across its markets to support the wages of its 37,000 staff during the enforced screen closures.
Cineworld had faced an angry backlash at the start of the crisis when it was accused of rushing to fire workers as it shut cinemas down, only to backtrack as the Job Retention Scheme got into gear.
Chief executive Mooky Greidinger told investors on Thursday: “The impact of COVID-19 on our business and the wider leisure industry has been substantial, with the closures of all of our cinemas worldwide for an extended period.
“During this unprecedented time, our priority has been the safety and health of our customers and employees, while at the same time preserving cash and protecting our balance sheet.
“Our mitigating actions included reducing and deferring costs where possible; making use of government support schemes for our employees; partially delaying capital investments; and suspending our dividend.
“We have also raised an additional $360.8m of liquidity to support our business.”
The company was threatened with legal action in May when it pulled out of a £1.6bn deal to buy Canada’s biggest chain, Cineplex.