COVID-19 Brutalizes AMC Theatres Quarterly Earnings, Losses Top $900 Million
AMC Theatres is probably relieved to see the final credits roll on its fiscal third quarter.
The world’s largest exhibitor suffered a brutal 90.9% drop in revenues during the most recent earnings period with sales clocking in at $119.5 million. Losses hit $905.8 million or $8.41 cents a share. In the prior-year quarter, a time when cinemas were open around the globe and world-altering pandemics were largely the stuff of Hollywood thrillers, AMC logged revenues of $1.3 billion on a net loss of $54.8 million or 53 cents a share.
AMC, which has had its locations closed for the bulk of the year, has slowly tried to reopen its venues with little success and amidst chatter that it might be on the verge of bankruptcy. Earlier on Monday, the cinema chain announced it was raising $47.7 million in cash to stay open — its shares plunged on the news. In its earnings report, AMC noted it had renegotiated its debt and theater leases, reduced its interest payments, and had raised $900 million in capital from new debt offerings and equity sales. AMC said it had secured more than $1 billion of concessions from creditors and landlords and raised more than $80 million from asset sales.
AMC isn’t alone in its struggles. The exhibition sector has been decimated by the coronavirus pandemic, with rival chains such as Cineworld announcing that they were shutting their locations back down. U.S. theaters have struggled to attract moviegoers during the public health crisis and the disappointing box office performance of Christopher Nolan’s “Tenet” has made studios skittish about releasing blockbuster movies until there’s a vaccine. Major releases such as “No Time to Die,” “Black Widow,” “Mulan” and “Soul” have been postponed until 2021 or moved to streaming services or on-demand debuts. There is skepticism that “Wonder Woman 1984,” the only blockbuster that hasn’t decamped from 2020, will stick to its Christmas release plans.
“The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theatre operations in the U.S. were suspended for nearly two-thirds of the quarter,” Adam Aron, CEO and president of AMC, said in a statement. “And yet, despite unrelenting obstacles, the AMC team continued to make significant progress in pursuit of our three key priorities: to strengthen our liquidity position; to dramatically reduce operating and capital expenditures, and to continue to safely and successfully restore our operations.”
Wall Street had expected AMC to report a loss of $4.66 per share on revenues of $119.5 million.
As of September 30, 2020, AMC said it has resumed operations at 467 domestic locations, representing under 80% of its venues.
More to come…