AMC Turns to Reopening Plans After Reporting $2.18 Billion Loss

(Bloomberg) -- AMC Entertainment Holdings Inc., the largest U.S. movie theater chain, reported a first-quarter loss of $2.18 billion after the coronavirus forced the company to close cinemas and threatened its ability to stay solvent. With the pandemic ebbing, the exhibitor has begun reopening in Europe and is planning to restart at home, too.

• AMC on Tuesday recorded an adjusted first-quarter loss of $2.22 a share, after announcing preliminary results announced on June 3. Revenue slumped to $941.5 million. The outlook this period looks worse: The chain has been closed since March 17, meaning most of the second quarter has been lost. While California is allowing theaters to reopen this weekend, AMC has said it expects to be fully open globally next month.
• During the quarter, AMC also wrote down the value of its assets, including acquisitions, leading to a charge of $1.85 billion and the large net loss.
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Key Insights

• All of AMC’s thousands of screens around the world have been dark for months amid the coronavirus lockdowns, and they will reopen under severe restrictions. In California, where AMC has more than 50 locations, cinemas can reopen June 12, but may only fill a quarter of the seats in order to maintain social distancing.
• The chain is also embroiled in a dispute with Comcast Corp.’s Universal Pictures after the studio, one of Hollywood’s largest, released “Trolls World Tour” to online audiences the same day the picture opened in theaters. AMC said it would stop showing Universal movies, and demanded the studio respect theater owners’ traditional exclusive rights to show new movies for about 90 days.
• The Leawood, Kansas-based chain warned last week it won’t be able to stay in business if theaters can’t reopen, and is negotiating with lenders, asking them to accept a steep haircut on existing debt. AMC disclosed last week it doesn’t expect to continue paying a dividend and said it will seek federal support under the Cares Act.

Market Reaction

• AMC shares were little changed in extended trading in New York. They have fallen 17% this year through Tuesday.

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