Cineworld swings to £2.19 billion of full-year loss for the first time in history
- Cineworld swings to £2.19 billion of full-year loss for the first time in history.
- The world's 2nd largest theatre chain to open cinemas in the U.S. next month.
- Cineworld Group plc valued its net debt at £6.07 billion at the end of 2020.
Cineworld Group plc (LON: CINE) said on Thursday that it swung to a £2.19 billion loss in 2020 as the Coronavirus pandemic pushed its theatres into temporarily shutting down. The company also expressed plans of increasing its debt ceiling, for which it intends to seek approval from its shareholders next month.
Cineworld shares slid roughly 4% in premarket trading on Thursday and lost another 7% on market open to trade at a per-share price of 91 pence. Learn more about how to choose winning stocks.
Cineworld to open theatres in the U.S. next month
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On top of closing roughly 800 of its cinemas in October, the ongoing health emergency also pushed Cineworld into temporarily laying off close to 45 thousand workers last year. The loss marks the first for Cineworld in history. The world’s 2nd largest cinema chain had posted £154.94 million of profit in 2019.
In separate news from the United Kingdom, B.T. said it achieved its target of extending full-fibre broadband to 4.5 million premises.
According to Cineworld, it will reopen its cinemas in the United States next month. The Brentford-headquartered company also highlighted to have secured commitments for a new 7.5% convertible bond worth £155.45 million due in 2025 to shore up finances. It also plans on opening theatres in the rest of the world, including the U.K., in May.
Cineworld, however, remained cautious about its ability to continue operations. The company warned that it will have to opt for another round of fundraising in the event of new COVID-19 related restrictions or further delays in the release of big-budget movies.
Cineworld values its net debt at £6.07 billion
Cineworld valued its net debt at £6.07 billion at the end of 2020. In comparison, the British company has a market cap of £1.28 billion at the time of writing. In November, Cineworld was rumoured considering entering a CVA (Company Voluntary Arrangement).
Adjusted for non-recurring items, Cineworld reported £970 million of loss in 2020. According to Refinitiv, experts had forecast the company to print a lower £940 million of loss instead. Its revenue slid to £622 million last year – an 81% decline from 2019.
According to analyst Susannah Streeter of Hargreaves:
“Crawling back to profitability after such a big hit will require almost superhero levels of effort.”
Cineworld performed largely downbeat in the stock market last year with an annual decline of close to 70%.