Cineworld looks to more hits like Spider-Man as losses drop to £536m

The world’s second-largest cinema chain Cineworld hopes more blockbusters will help it to bounce back from a two-year lull, but its mounting debt pile remains an ongoing challenge.

The London-headquartered firm with over 9,000 screens globally saw 2021 losses narrow to £536million from about £2.2billion, thanks partly to Marvel superhero blockbuster ‘Spider-Man: No Way Home’.

This year it is pinning hopes on sequels such as James Cameron’s ‘Avatar 2’ and Tom Cruise in ‘Top Gun: Maverick’, as well as several Marvel films.

The world’s second-largest cinema chain Cineworld has said that it hopes more blockbusters will help it to bounce back from a two-year lull

The strong line up of films kicked off this month with the release of The Batman. 

Mooky Greidinger, chief executive of Cineworld, said the group is now ‘well positioned to execute its strategy and capitalise on the highly anticipated movie schedule’ over the rest of the year. 

The company revealed on Thursday that admissions grew by 75.2 per cent to 95.3 million in 2021 as it benefited from the loosening of pandemic restrictions.

It added that total revenues leapt to £1.37billion for the year, compared with £646million in 2020.

Cineworld shares moved 3 per cent higher in early trading, before slipping to a loss of 1 per cent in the afternoon to 37.62p. 

As a result, it also cut its annual losses to £429 million, compared with its mammoth £2billion loss from the previous year.

Mr Greidinger added: ‘Whilst our 2021 results still reflect the impacts of Covid-19, particularly at the start of the financial year, we are encouraged by the recent strong trading performance throughout the final quarter.

‘It is clear that our customers remain loyal and have missed the big screen experience as well as the sociability of watching a movie with others.

‘Our strong final-quarter performance reflects the pent-up demand for affordable out-of-home entertainment and the record-breaking film slate, including Spider-Man: No Way Home, which showcased the importance of cinematic releases.’

Despite the optimism, any movie delays and further Covid-19 restrictions that could hit ticket sales pose a risk to Cineworld’s ability to repay credits due in June and early 2023.

Its net debt stood at £6.7billion at end-December, up some £454million in 2020. Refinitiv data showed its credit score had sunk to 1, the lowest on a scale of up to 100, meaning it was highly likely to default in the next year.

Shares in Cineworld have also plunged by around two thirds over the past year as recovery optimism was dented by two legal spats. 

Its setbacks include a potential multi-million-dollar fine in a dispute with Canada’s Cineplex and delayed payments to disgruntled former shareholders of its U.S. chain Regal.

Cineworld has warned that it would not have enough liquidity to pay the C$1.23 billion ($971 million) sought by Cineplex as damages if its court appeal is unsuccessful.

It is now looking for new sources of liquidity after raising over $425 million last year.

Cineworld, which operates in 10 countries including the United States and the United Kingdom, admitted 95 million movie-goers in 2021, up 75% over 2020, but well below the 275 million seen pre-pandemic. 

This post first appeared on Dailymail.co.uk