The second largest exhibitor in the world, which had already accumulated a stock market crash of 80% since the beginning of the year, attributes the decision to the absence of premieres by film studios
The shares of the second largest chain of cinemas in the world, Cineworld, plummet this Monday more than 30% in the first minutes of trading on the London Stock Exchange after the weekend announced the temporary suspension of activity in its theaters 546 in the United States and 126 in the United Kingdom, its two main markets, as of this Thursday. The measure, which the company attributes to the absence of new films by film studios, will affect its employees, more than 37,000 worldwide, in the first instance. But the backdrop is the pandemic and its undoubted impact on the influx of customers to theaters.
When communicating the measure, last weekend, Cineworld specified that it will communicate at the appropriate time any future plans to resume operations in these markets once there is a more concrete perspective on their reopening and the studios can carry out new launches. “It is not a decision that we have taken lightly. We have done everything in our power to support safe and sustainable reopening in all of our markets, ”said its CEO, Mooky Greidinger. “We have reached a stage in which we have no alternative, it was a very, very difficult decision for us, mainly in view of the measures that we will have to take with the employees,” the British television channel Sky added in a statement on Monday. News. “We were losing much greater amounts of liquidity being open than closed.” That seems to be the real trigger for the temporary suspension of its activity.
To subtract some drama from the measure, Greidinger has slipped that the decision is due to an attempt to ensure the long-term future of the company. “Our responsibility as management is to see what is the best way for the company to move forward. We will obtain the liquidity we need, we have the full support of the banks that are working with us, but we must be careful and act responsibly. With this measure, we are strengthening the company’s position ”.
Cineworld lost 1,582.5 million dollars (1,359 million euros) in the first half of the year, compared to earnings of 117.4 million dollars (100.8 million euros) obtained in the same period of the previous year. The bulk of this decrease is directly attributable to the confinements that caused a 66% drop in income in the same period. Before the crash this Monday, Cineworld titles already accumulated a collapse of more than 80% in a fateful 2020.
On Sunday, the British newspaper The Sunday Times reported that company executives had written to UK Prime Minister Boris Johnson and to his Minister for Culture, Oliver Dowden, to warn that their activity was becoming unviable. In late September, the firm warned investors that it might need to raise more money if its venues were forced to close again.
The recent delay in the release of the new James Bond movie, No Time To Die, until next year it has been the last straw for the industry, hitting the hopes of a rebound in 2020. In parallel, the increasing rates of infection by coronavirus are causing new restrictions in several parts of Europe and that the spectators move away again from the rooms. Efforts to get audiences back to theaters have been disappointing, and many small and medium-sized film companies have said they cannot survive the impact of the pandemic.