AMC Entertainment Expects To Be “Fully Opened Globally” In July, Posts Expected, Massive Q1 Loss

AMC Theaters, BoxOffice, Breaking News, coronavirus, Corporate Affairs, Earnings, Exhibition, exhibition. first quater, Reopening

Giant exhibitor AMC Entertainment said net losses swelled to $2.18 billion, including a giant $1.8 billion in non-cash impairment charges, for the first quarter of the year from a negative $130 million the year before in what CEO Adam Aron called “unprecedented times.”

Revenue dropped 22% to $941 million from $1.2 billion for the three months ended in March. The nation’s largest chain had presaged the number last week when it announced preliminary, unaudited results within a range that it filed with the SEC. The loss was at the lower end of the range it had predicted — of between $2.1 to $2.4 billion.

AMC is currently planning to reopen almost all of our U.S. and U.K. theatres in July, to be positioned to showcase Warner Bros’ release of Christopher Nolan’s Tenet now slated for release on July 17 followed by Disney’s Mulan now slated for release on July 24. So far it has already reopened 10 theatres in Norway, Germany, Spain and Portugal and expects to be fully opened globally in July.

“AMC’s 2020 fiscal year started strongly with total revenues up nearly 10% compared to the prior year through February.” Aron said in a statement. “However, as theatres in Italy and across Europe began closing in late February and social distancing practices were initiated in the U.S. in response to the ensuing COVID-19 global pandemic, attendance and revenues began to deteriorate in early March.”

On March 17, he contined, “in response to COVID-19 safety concerns for our associates and guests, and in compliance with local, state and federal directives, AMC suspended operations at all domestic and international theatres, resulting in virtually no revenue for the Company for the remaining two weeks of the first quarter. These are truly unprecedented times. I join with all our employees around the world to offer our sympathies to those affected by the coronavirus, as well as our sincerest gratitude to those on the front lines,” said Aron. “After starting the year with two solid months of revenue growth compared to last year, in midMarch we were forced to pivot the entire company to respond to the effects of the pandemic.”

The nation’s largest theater chain said last week that it wasn’t sure it could continue as a going concern. Big ratings agencies Moody’s and S&P downgraded the company’s credit rating over a controversial distressed debt swap that would force holders to take a haircut. S&P called the move tanamount to a default. The shares rallied last week however, buoyed by hope of reopening this summer — a few of its international theaters have opened in Norway. The stock fell today along with the broader market and a continued lack of clarity.

“We believe, but cannot guarantee, that the exhibition industry will ultimately rebound and benefit from pent-up social demand for out-of-home entertainment, as government restrictions are lifted and home sheltering subsides. However, the ultimate significance of the pandemic, including the extent of the adverse impact on our financial and operational results, will be dictated by the currently unknowable duration and the effect on the overall economy and of responsive governmental regulations, including shelter-in-place orders of the pandemic and mandated suspension of operations,” the company said in an SEC filing.

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