COVID-19: Cineworld raises more cash as annual losses top $3bn
Written by Hitmix News on 25 March 2021
Cineworld has reported worse than expected annual losses of just over $3bn (£2.2bn) and revealed a new funding round to help it navigate future coronavirus-related uncertainty.
The company, which announced earlier this week screen reopening plans for its key US and UK markets, said it had cash in place to see it through this year and beyond though material uncertainty around its ability to continue as a going concern remained.
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Image: Cineworld has more than 500 Regal-branded cinemas in the United States. Pic: AP
As a result, Cineworld said it had secured commitments for a new $213m (£156m) convertible bond as a safeguard.
Its statutory loss for 2020 reflected a horror show of a year that saw its estate shut down for months at a time.
It remains so due to continuing COVID-19 restrictions.
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Revenues came in at $852m – compared with more than $4bn in 2019.
The company’s action to shore up its finances included seeking debt waivers, taxpayer support and securing a $750m (£552m) funding lifeline to ensure its survival.
Despite that backdrop, shareholders approved earlier this year an executive bonus plan that could see chief executive Mooky Greidinger net £65m in three years’ time – subject to certain targets being met.
The company closed its UK and US cinemas in October as studios delayed major box office releases ahead of tightening restrictions to protect public health.
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Cineworld boss: ‘We had no alternative’
It employed 5,500 people at that time in the UK.
Sky News revealed on Tuesday claims from a workers’ campaign group, which has accused the company of treating staff with “contempt”, that Cineworld faced a rush to find enough staff to reopen its 127 UK sites in May as planned.
It is understood that Cineworld’s contracted staff were made redundant in October though other workers were offered furlough and those who remain on part-pay have been promised work, from May, if they want it.
Cineworld has not reported the number of workers still on its UK books though many are believed to have left to pursue other opportunities.
Shares fell by more than 9% in early trading.
Mr Greidinger said of the annual results: “For all of us across the world, this has been an incredibly challenging year.
“COVID-19 has created a huge amount of stress and uncertainty, both in business and in our personal lives.
“At Cineworld, I never imagined a time that we would see the closure of our entire cinema estate, nor that varying restrictions would remain in place for so long as we continue to navigate our way through this crisis.”
He added: “Cineworld enters 2021 confident about the next chapter in our development; not least the intention to reopen our cinemas starting (in the US on) April 2nd.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the company’s statement: “The numbers are eyewatering, with losses totalling just over $3bn for the year compared to a $212m profit last year.
“Crawling back to profitability after such a big hit will require almost superhero levels of effort and the company has warned that material uncertainty around its ability to continue as a going concern remain.”