March 6, 2020 / 7:52 AM / a month ago

Cineworld puts faith in movie-goers as stock reels from Bond delay

(Reuters) - Cineworld (CINE.L) said the coronavirus outbreak had not hurt its movie theatre admissions as it sought on Friday to reassure investors after the global release of the new James Bond movie was delayed.

FILE PHOTO: Workers repair a sign at a Cineworld cinema in Bradford northern England, March 24, 2016. REUTERS/Phil Noble

Shares in Cineworld were down 5% on Friday, after falling as much as 24% on Thursday and hitting a seven-year low, after the postponement of the Bond film “No Time to Die” by seven months due to movie theatre closures in China.

“Although the release of the new Bond movie has been postponed to November 2020...studios have advised us that in the countries in which we operate, they currently remain committed to their release schedule for the coming months and remainder of the year,” the company said in an unscheduled statement.

London-listed Cineworld does not have any theatres in Asia and generates most of its revenue in the United States.

The company’s stock price has nearly halved since it announced the $1.65 billion (1.3 billion pounds) acquisition of Canada’s Cineplex (CGX.TO) last December, nearly two years after it agreed to buy Regal cinemas for $3.6 billion, triggering debt concerns.

On Friday, Cineworld said its debt stood at $3.48 billion excluding lease liabilities, compared to an adjusted net debt of $3.3 billion according to its interim results last August.

The delay of the Bond film has added to concerns that theatre-goers are likely to stay home for fear of catching the fast-spreading virus. Shares of U.S. theatre operators AMC Entertainment (AMC.N) and Cinemark (CNK.N) also fell after the announcement.

Box office revenues in China fell 80% over the first 8 weeks of the year, according to Morgan Stanley.

The top 10 films account for around 40% of box office revenue in a typical year, Peel Hunt analysts said on Thursday, adding that there could be further changes in release schedules.

Cineworld said it has measures at its disposal to reduce the impact on its business from the outbreak, including postponing its spending and cutting costs.

The company on Friday posted adjusted core earnings of $1.03 billion for the year ended Dec. 31, missing analysts’ average estimate of $1.05 billion, according to Refinitiv IBES data.

Cineworld, which had earlier hinted at slightly lower annual performance, is scheduled to post full-year results on March 12.

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Vinay Dwivedi and Alexander Smith

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