Beleaguered Cineworld Says Ticket Sales Haven’t Recovered Fast Enough Despite Rise Of Big-Budget Movies
- Admissions soared 487% to 82.8 million in the first half of 2022
- Cinema operators face massive competition from streaming platforms
- Cineworld Group filed for Chapter 11 bankruptcy in the US earlier this month
Cineworld Group says ticket sales have not recovered as quickly as expected despite the lifting of Covid-related restrictions.
The struggling theater chain said demand in the US, its biggest market, got off to a slow start this year due to the rise of the Omicron variant and a lack of new big blockbusters.
Admissions grew significantly as lockdowns were lifted, soaring 487 per cent to 82.8 million in the first six months of 2022, but still nearly 40 per cent below pre-pandemic volumes.
Recovery: Cineworld ticket sales soared 487% to 82.8 million in the first six months of 2022, but were still nearly 40% below pre-pandemic volumes
Cineworld now warns that it expects total admissions over the next two financial years to remain below 2019 levels, in part because external forecasts call for fewer theatrical releases.
Cinema operators have not only struggled in recent years with declining viewing figures and forced closures, but also with growing competition from popular streaming platforms like Netflix and Amazon Prime.
Financial pressures have been exacerbated at Cineworld by its acquisition of debt-laden US chain Regal Entertainment for £2.7bn in 2017, making it the world’s second-largest cinema chain.
Big-budget sequels like The Batman, Top Gun: Maverick, and Doctor Strange in the Multiverse of Madness provided a much-needed boost to its revenue.
As a result, the company’s revenue soared 417% to more than $1.5 billion and after-tax losses fell 43% to $293.8 million.
However, a weaker-than-expected pick-up in demand led the company to lose another $144.9 million in cash and lower its immediate and medium-term outlook.
Three weeks ago, it filed for bankruptcy in the US to undertake a restructuring, reduce its huge debt and access short-term liquidity.
Alicja Kornasiewicz, President of Cineworld Group, said: “The lingering impact of the Covid-19 pandemic contributed to our continuing to face pressures, particularly in relation to our balance sheet and liquidity position.
“This led us to initiate a Chapter 11 restructuring process in the US that aims to create a more effective business and a strengthened capital structure to better position Cineworld for the future.”
The London-listed firm expects to do well in the latest quarter thanks to a string of blockbuster winter releases, including Black Adam, the superhero movie Black Panther: Wakanda Forever and the epic adventure Avatar: The Way of Water.
However, eToro analyst Adam Vettese said “the curtain may well be coming down” for Cineworld, given the cost-of-living crisis and competition from streaming services.
He added: ‘The pandemic was just a big push for consumers who had long since started to change their movie-watching habits. Like other defunct media technologies such as videocassette and DVD, cinema unfortunately seems to be going down the drain.’
Cineworld Group Shares they fell 4.8 percent to 2.95 pence early Friday. Since the beginning of 2022, its value has plummeted by around 90 percent.