Ailing cinema giant Cineworld (LON:UK) watched its shares slide as it posted its results for an extremely challenging six months of trading.
With attendance greatly hampered by lockdown and a lack of new releases thereafter, the company saw revenues fall year-on-year by 66.9% for the six months ended 30 June, down from $2.15 billion, to $712 million.
This slide also saw group earnings EBITDA contract by 93%, from $759 million to $53 million, and a swing from a $140 million profit for the six month period in 2019, to a $1.64 billion loss during the same period in 2020.
The situation was equally bleak for the company’s shareholders, with both basic and diluted earnings per share swapping from 8.6c earnings, to 115.3c losses, respectively. Similarly, the company.
Similarly, while the company will be pleased to have raised a much-needed $361 million of cash from sale and leaseback agreements, it also meant cancelling its dividend back in April, with this suspension having being sustained in Thursday’s announcement.
Looking ahead, the company says it has reopened 561 of it 778 sites, with the majority of those yet to open being in the US (200 still closed). It added that negotiations are ongoing with banks, in efforts to obtain covenant waivers in respect of December 2020 and June 2021 – Cineworld might also attempt to carry out similar negotiations with its landlords, should more Covid restrictions come into force in the coming months.
Cineworld continued, saying that there can be no certainty as to the future impact of Covid, though it stated that further restrictions could see it close its estate once again, and further push back movie releases.
Speaking on the results and the company’s outlook, Third Bridge Senior Sector Analyst, Harry Barnick, said the following:
