Cineworld swings to loss, says may need to raise more money

(Reuters) - Cineworld said on Thursday it might need to raise more money if it is required to shut its theatres again following fresh pandemic curbs, as the world’s second-biggest cinema operator swung to a first-half loss, sending its shares down 17%.

FILE PHOTO: A Cineworld cinema logo is pictured in Canary Wharf in London, Britain, March 11, 2020. REUTERS/Keith Weir/File Photo

The British company, for which the United States is the largest market, said it was in talks with lenders to avoid an impending loan default, and flagged risks to its ability to continue as a ‘going concern’ as studios delay major releases and people stay away from theatres.

“If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity,” the company said.

Cineworld shares were down 17.5% at 42.3 pence by 0713 GMT.

New curbs could be a major setback after the cinema chain reopened 561 out of 778 sites, highlighted the strong performance of Christopher Nolan’s “Tenet” earlier this month, and said it was looking forward to other big movie releases.

But Walt Disney on Wednesday postponed the release of superhero movie “Black Widow” and Steven Spielberg’s “West Side Story” until 2021 in another setback to cinema operators. “Mulan” also skipped most theatres and went directly to Disney’s streaming platform.

The world’s largest cinema chain AMC and Comcast Corp’s Universal Pictures agreed in July that the studio’s movies would be made available to U.S. audiences at home after just three weekends in cinemas.

Cineworld Chief Executive Officer Mooky Greidinger, however, said his company would follow the usual route.

“Our policy regarding the theatrical window remains unchanged as an important part of our business model, and we will continue to only show movies that respect it,” he said in a statement.

The Regal cinema operator posted a pretax loss of $1.64 billion for the six months ended June 30, from a profit of $139.7 million last year as its cinemas were shut from mid-March until August.

Reporting by Tanishaa Nadkar in Bengaluru, Editing by Sherry Jacob-Phillips, Saumyadeb Chakrabarty and Tomasz Janowski