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Cineworld says ticket sales have failed to recover fast enough

Recovery: Cineworld ticket sales soared 487% to 82.8 million in the first six months of 2022, but this was still nearly 40% below pre-pandemic volumes

Embattled Cineworld says ticket sales haven’t recovered fast enough despite surge in big budget movies

  • Admissions jumped 487% to 82.8 million in the first half of 2022
  • Theater operators face massive competition from streaming platforms
  • Cineworld Group filed for Chapter 11 bankruptcy in the United States earlier this month

Cineworld Group says ticket sales have not recovered as quickly as expected despite the removal of Covid restrictions.

The struggling cinema chain said demand in the United States, its biggest market, has had a slow start this year due to the emergence of the Omicron variant and a lack of major new blockbusters.

Admissions rose significantly as lockdowns were lifted, climbing 487% to 82.8 million in the first six months of 2022, but that was still nearly 40% below pre-pandemic volumes.

Recovery: Cineworld ticket sales soared 487% to 82.8 million in the first six months of 2022, but this was still nearly 40% below pre-pandemic volumes

Recovery: Cineworld ticket sales soared 487% to 82.8 million in the first six months of 2022, but this was still nearly 40% below pre-pandemic volumes

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

Cinema operators have not only struggled in recent years with a shortage of viewing figures and forced closures, but also growing competition from popular streaming platforms like Netflix and Amazon Prime.

Financial pressures have been exacerbated at Cineworld by its hefty £2.7bn acquisition of US chain Regal Entertainment in 2017, which made it the world’s second largest cinema chain.

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

As a result, the company saw its revenue increase 417% to more than $1.5 billion, and after-tax losses drop 43% 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 immediate and medium-term outlook.

Three weeks ago, it filed for bankruptcy in the United States in order to undertake a restructuring, reduce its huge debt load and access short-term liquidity.

Alicja Kornasiewicz, Chairman of Cineworld Group, said: “The lingering impact of the Covid-19 pandemic has allowed us to continue to face pressures, particularly on our balance sheet and liquidity position.

“This has led us to initiate a Chapter 11 restructuring process in the United States which aims to create a more efficient business and a strengthened capital structure to better position Cineworld for the future.”

The London-listed company expects to do well in the last quarter thanks to a slew of blockbuster winter releases, including Black Adam, superhero film Black Panther: Wakanda Forever and epic adventure Avatar: The Way. of Water.

However, eToro analyst Adam Vettese said “the curtain may well come down” 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 had long since begun to change their movie viewing habits. Like other defunct media technologies such as the video cassette and the DVD, the cinema seems, unfortunately, to be going around the sewer.

Shares of Cineworld Group fell 4.8% to 2.95p late Friday morning. Since the start of 2022, their value has fallen by around 90%.

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