Cineworld says ticket sales have failed to recover fast enough

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Controversial Cineworld says ticket sales haven’t recovered fast enough despite the wave of big-budget movies

  • The number of admissions increased by 487% to 82.8 million in the first half of 2022
  • Movie theater operators face huge competition from streaming platforms
  • Cineworld Group filed for Chapter 11 bankruptcy in the US earlier this month

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Cineworld Group says ticket sales have not recovered as quickly as expected, despite the lifting of Covid-related restrictions.

The struggling cinema chain said demand in the US, its largest market, has been slow to pick up this year due to the rise of the Omicron variant and a lack of major new blockbusters.

Withdrawals grew significantly when lockdowns were lifted, rising 487 percent to 82.8 million in the first six months of 2022, but this was still nearly 40 percent below pre-pandemic volumes.

Recovery: Cineworld ticket sales shot up 487% to 82.8 million in the first six months of 2022, but still close to 40% below pre-pandemic volumes

Recovery: Cineworld ticket sales shot up 487% to 82.8 million in the first six months of 2022, but still close to 40% below pre-pandemic volumes

Cineworld now warns that it expects total admissions to remain below 2019 levels over the next two fiscal years, in part because external forecasts predict a smaller amount of theatrical releases.

Cinema operators have struggled in recent years not only with lack of ratings and forced closures, but also with increasing competition from popular streaming platforms such as Netflix and Amazon Prime.

Financial pressures have been exacerbated at Cineworld by the debt-laden £2.7bn acquisition of US chain Regal Entertainment in 2017, making it the second largest cinema chain in the world.

Big-budget sequels, such as The Batman, Top Gun: Maverick, and Doctor Strange in the Multiverse of Madness, provided a much-needed boost to revenue.

As a result, the company saw revenues skyrocket 417 percent to over $1.5 billion, and after-tax losses jump 43 percent to $293.8 million.

Still, the weaker-than-expected rebound in demand led the company to lose another $144.9 million in cash and lower its short- and medium-term outlook.

Three weeks ago, the U.S. filed for bankruptcy to restructure, reduce its massive debt mountain and access short-term liquidity.

Alicja Kornasiewicz, the chairman of Cineworld Group, said: “The continued impact of the Covid-19 pandemic has helped to keep us under pressure, particularly with regard to our balance sheet and liquidity position.

“This prompted us to embark on a Chapter 11 restructuring process in the US that aims to create more effective operations and a strengthened capital structure to better position Cineworld for the future.”

The London-listed company expects to perform strongly in the final quarter of a slew of winter blockbusters, including Black Adam, the superhero film Black Panther: Wakanda Forever and the adventure epic Avatar: The Way of Water.

However, eToro analyst Adam Vettese said “the curtain may fall” for Cineworld given the cost of living crisis and competition from streaming services.

He added: “The pandemic was just a big boost for consumers who started changing their movie consumption habits long ago. Unfortunately, like other defunct media technologies, such as the videocassette and DVD, the cinema seems to be failing.’

Cineworld Group shares were down 4.8 percent to 2.95p during late morning Friday. Since the beginning of 2022, their value has plummeted by about 90 percent.