12th Mar 2020 08:40
(Alliance News) - Cineworld Group PLC on Thursday posted a profit fall during a year which had a weaker "comparative film slate" and added that the full impact of covid-19 will be uncertain.
Cineworld affirmed it has seen "no material impact" from the coronavirus outbreak though the contagion forced film studios MGM and Universal to postpone the release of the latest James Bond film to November, from the original April.
Shares in the company were 24% lower at 67.58 pence each in London on Thursday morning.
In 2019, London-based Cineworld said its profit fell by two-thirds to USD212.3 million from USD349.0, due to biting finance expenses which more than doubled from 2018. This was largely due to a lease liability interest charge of USD304.2 million compared to USD6.9 million in 2018.
There was, however, a 6.1% rise in revenue to USD4.37 billion from USD4.12 billion, though Cineworld cautioned that on a pro-forma basis, revenue slipped from 2018.
"Revenue decreased by 6.2% on a pro-forma basis from 2018 basis due to the strong comparative film slate and closure of loss making sites in the US," Cineworld explained.
The measure assumes Regal Entertainment acquisition, an acquisition it got over the line in 2018, was part of the group for the entirety of that year, rather than just ten months.
Box Office revenue in 2019 rose 1.6% to USD2.54 billion, though that represented a 10% slip from the 2018 pro-froma figure. Retail revenue climbed 8.3% to USD1.24 billion, but again, this was a 4.5% fall on the 2018 pro-forma sum.
Turning to dividends, the company upped its payout by 3.3% to 15.5 cents per share.
Chair Anthony Bloom said: "2019 was a solid year for Cineworld, a year in which over 275 million customers watched movies on our screens.
"It is thus ironic that these achievements should be overshadowed by the negative impact of the global covid-19 crisis, even though that at the time of writing the group's operations have not been affected to a material degree. I am of course conscious of the possibility that events could develop adversely very quickly and change this position in the short term, but I remain confident that the crisis will ultimately pass and that the cinema exhibition industry will continue to play a major role."
The company added that it has been advised by studios that "they currently remain committed to their release schedule for the coming months and remainder of the year".
In a worst case downside scenario, the company said that should it lose out on the equivalent of between two and three months worth of revenue, it could be at risk of breaking financial covenants, unless a waiver pact is reached with a majority of its lenders.
Looking ahead Cineworld said it has delivered a "solid box office performance year to date with compelling film slate scheduled for 2020".
By Eric Cunha; [email protected]
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