Yahoo News Movie Theater Chain Stocks Pop on ‘Super Mario Bros.’ Box Office Haul
Share prices for top cinema chains — including AMC Theatres and Imax — have popped in the wake of a strong global box office launch for Illumination and Universal’s Nintendo video game adaptation The Super Mario Bros. Movie.
AMC Entertainment Holdings, the parent of AMC Theatres, the biggest movie chain globally, saw its stock rise by 35 cents, or just over 7 percent, to $5.25. And shares in Imax — whose giant screens allow exhibitors to charge a premium ticket price — jumped by $1.05, or just over 5 percent, to $20.85 as the Super Mario Bros. pic scored the top opening of all time for an animated film with $375.6 million in worldwide ticket sales, according to final numbers.
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Movie fans running to the cinemas over the weekend in record numbers for an animated pic had credit ratings agency Fitch touting the box office recovery for debt-laden movie chains looking to shrug off the impact of pandemic disruption on their debt servicing, even if getting back to pre-COVID-crisis credit ratings won’t happen soon.
“We expect theatrical attendance will continue to recover on sequential basis, driven by increased comfort in out-of-home environments, broader film slates accessing theatrical releases, including the return of video streaming studios into the theatrical release and distribution, growing on a mid-to-low single digits throughout the rating horizon,” Fitch said in a report Monday. “However, our ratings case projections do not assume attendance returns to historical levels over the rating horizon.”
Shares in Cinemark Holdings leapt by 97 cents, or nearly 7 percent, to $16.21, while Canadian cinema chain Cineplex also saw its stock lift by 34 cents, or nearly 5 percent, to $6.89 (in U.S. dollars).
Shares in Regal Cinemas-owner Cineworld did not trade on Monday on the London Stock Exchange because of the Easter Monday holiday for the U.K. financial exchange. Cineworld earlier this month said it had struck an agreement with lenders that would see it emerge from Chapter 11 bankruptcy via a restructuring during the first half of 2023, even though that process could be delayed.
Despite that improving credit picture for Cineworld and other major cinema chains, Fitch warned that Hollywood box office returning to the doldrums would complicate any recovering for major exhibitors.
The theater sector’s “credit profiles and ratings could remain under pressure if attendance growth fails to reach expected levels, limiting issuers’ ability to repair balance sheets,” the debt ratings firm argued.
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