July 24, 2020 / 11:37 AM / 20 days ago

Cineworld, AMC shares fall as cancelled premieres spell more pressure

(Reuters) - Shares in cinema operators Cineworld (CINE.L) and AMC (AMC.N) fell on Friday after Disney (DIS.N) delayed the release of “Mulan”, the latest Hollywood tentpole to be pushed back as theatres remain largely shut because of the coronavirus crisis.

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

Chinese-controlled AMC (AMC.N), the United States’ largest chain, said on Thursday it was postponing reopenings across the country as COVID-19 cases grow at an alarming rate in some states.

Britain’s Cineworld, which has also delayed the reopening of its U.S. theatres to mid-August, has reopened in Europe and plans to restart main UK operations at the end of July, but analysts worry that could be delayed and predict limited ticket sales.

Shares in Cineworld, already headed for their worst-ever yearly fall with an 80% plunge, were down 9% at 48.3 pence by 1103 GMT.

“Until the total relaxation of social distancing rules, the pressure on finances will be quite significant, which suggests more job losses and cinema closures in the months ahead,” CMC Markets analyst Michael Hewson said.

J.P.Morgan analyst Alexander Mees estimated Cineworld would burn around $50 million per month while cinemas remain shut.

Rating agency Fitch last week said the company’s abandoning of its purchase of Canadian chain Cineplex and increased debt facilities could help it withstand another 9 to 10 months of cash-burn.

The delay of “Mulan” follows the cancellation of the release of Christopher Nolan’s thriller “Tenet” this week. Paramount Pictures also delayed “Top Gun: Maverick” until Dec. 23, 2020, while several other big-budget releases have been pushed back.

“Cinema-going will not be back in full swing until there is new content to show,” Mees said.

“The risks are high ... as we do not know at this stage whether customers will come back in the same numbers. It will also take a few years to work off (Cineworld’s) debt balance.”

Reporting by Muvija M in Bengaluru, additional reporting by Tanishaa Nadkar; Editing by Saumyadeb Chakrabarty

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