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Ailing exhibition giant Cineworld Group, which is currently finalizing a reorganization plan having filed for Chapter 11 bankruptcy in the U.S. earlier this month, has released encouraging interim results for the six months to June 30, 2022.
Overall revenue rose to $1.5b against $292.8m in the same period in 2021, for a gross profit of $424.5m and an operating profit of $57.3m, against an operating loss of $208.9m in the same period last year.
The company’s debt position worsened, however, standing at $5,2b on June 30, against $5.03b on December 30, 2021.
The exhibitor, which operates 747 sites and 9,139 screens in 10 territories worldwide, led by the U.S. and the U.K., said admissions had started to recover over the period as final Covid-19 restrictions were lifted but warned it did not expect the box office to return to pre-pandemic levels in 2023 and 2024.
Detailing admissions, it said that after a slow start in Q1 due to a lack of major releases and customer concerns around the Omicron variant, total admissions had strengthened to come in at 82.8m in the six months ended 30 June 2022, split between 33.6m in Q1 and 49.2m in Q2, for a total box office of $833.6m.
This represented 68.7m admissions more, or a 487% jump, than the same period in 2021, in which there were 14m admissions for a box office of $140.4m.
The figure was still down on 2021 levels, representing approximately 61% of the admissions achieved in the first six months of 2019, the last full financial year unaffected by the pandemic.
The group said it had revised its short and medium-term cinema admission forecasts, due to a slower than expected recovery in 2022 and indications of a lower volume of theatrical releases in 2023 and 2024, which would keep admissions below pre-pandemic levels until 2025.
“This has been a challenging period for Cineworld due to the unprecedented impact of the COVID-19 pandemic on our business and its lagging and continuing disruption to film schedules,” said Cineworld CEO Mooky Greidinger.
He expressed optimism for the future of the business on the back of the success of films such as Top Gun: Maverick and Doctor Strange In The Multiverse Of Madness.
“We have been encouraged by the gradual ongoing recovery in our performance over recent months – as pandemic restrictions ended, guests returned for popular movies,” he said.
“The performance of key blockbusters in the first half, including Top Gun: Maverick; Doctor Strange in the Multiverse of Madness; Jurassic World Dominion; The Batman, illustrates the continued demand for such special cinematic experiences,” he added.
The group said it had also been encouraged by the increase in Average Ticket Prices (ATP) and Spend Per Person (SPP).
“Compared to the same period in 2021, ATP was up by 1.1% while SPP was up by 2.6%. This increase is significantly more pronounced when compared against pre-pandemic levels, with ATP up 7.9% and SPP up 26.6% in the same period in 2019,” said the group.
The group noted, however, that there was no indication that ATP and SPP would return to pre-pandemic levels in the short or medium-term, especially with the brewing cost of living crisis in the backdrop.
Greidinger and Alicja Kornasiewicz, chair of Cineworld Group, both addressed the company’s Chapter 11 proceedings.
Kornasiewicz said the restructuring process set in motion by filing for Chapter 11 in the U.S. would “create a more effective business and strengthened capital structure to better position Cineworld for the future.”