Troubled cinema chain Cineworld revealed that its cash reserves shrank by almost two-thirds over the first half of this year as it warned over weak admissions.
The debt-laden business told investors that audiences are set to remain below pre-Covid levels for at least the next two years as it reported worse-than-expected trade over the past quarter.
The group, which runs 747 cinemas globally, said admissions over the three months to September “have been below expectations”.
Cineworld filed for special bankruptcy in the US in a bid to buy time to restructure its business earlier this month after blaming a “limited” film slate for weak audience numbers.
The group, which also runs Regal cinemas in the US, said it also now expects a “lower volume of theatrical releases in 2023 and 2024” as more releases switch to streaming platforms.
However, it highlighted that it expects some improvement in the final quarter of 2022, amid the scheduled releases of blockbusters including Black Adam, Black Panther: Wakanda Forever, and Avatar: The Way Of Water.
Cineworld said it has benefited from the easing of pandemic restrictions this year but saw increased “cash burn” due to the “slower-than-expected recovery in H1”.
The company had 131 million US dollars (£117 million) in cash at the end of June, compared with 354 million dollars (£317 million) at the end of December last year.
On Friday, it also revealed a 487% jump in admissions to 82.8 million over the half-year to June, after pandemic restrictions were eased compared with the same period last year.
As a result, it reduced its losses to 364.9 million dollars (£327 million), from 576.4 million dollars (£508.5 million) over the same period last year.
Cineworld Group chief executive Mooky Greidinger said: “This has been a challenging period for Cineworld due to the unprecedented impact of the Covid-19 pandemic on our business and its lagging and continuing disruption to film schedules.
“Covid-19 continued to weigh on our trading during the half-year, although we have been encouraged by the gradual ongoing recovery in our performance over recent months – as pandemic restrictions ended, guests returned for popular movies.
“The performance of key blockbusters in the first half, including Top Gun: Maverick; Doctor Strange in the Multiverse of Madness; Jurassic World Dominion; The Batman, illustrates the continued demand for such special cinematic experiences.
“Despite these encouraging signs and a highly anticipated slate of movies later this year, we needed to strengthen our balance sheet and liquidity position after the deep and unprecedented impact of Covid-19.
“We therefore commenced a Chapter 11 restructuring process in the US to implement a de‐leveraging transaction that will provide the financial strength and flexibility to accelerate and capitalise on, Cineworld’s strategy.”