AMC Looks At Reopening Theaters As Revenue Evaporates During Worldwide Lockdowns

AMC Entertainment Holdings Inc. AMC took in almost no revenue in the first two weeks of the first quarter that ended March 30, with theaters closed due to the pandemic. The company is now looking to reopen all its venues.

What Happened

AMC reported a net loss of $2.2 billion in Q1 2020, as the pandemic took a steep toll on its balance sheet. Most of the losses were due to $1.8 billion in non-cash impairment charges. Revenue declined 22% to $941.5 million, compared with $1.2 billion last year.

CEO Adam Aron admitted, “After starting the year with two solid months of revenue growth compared to last year, in mid-March we were forced to pivot the entire company to respond to the effects of the pandemic.”

The company is looking forward to reopening its cinemas and starting ticket sales. AMC said they have reopened a total of 10 theaters in Norway, Germany, Spain, and Portugal and expect to reopen almost all venues in the United States and the United Kingdom by July.

Why It Matters

AMC is the world’s largest movie-theater chain, according to the WSJ. It has more than 1,000 theaters with 11,000 screens worldwide.

AMC’s July reopening could face challenges from local lawmakers and their plans to restart their economies.

Some states such as California, have said theaters could begin to resume operations this month, while New York has kept their reopening for the fourth phase of its plan. The first phase began this week.

According to AMC, it is consulting with Harvard University School of Public Health on creating a safe environment for guests and associates during the resumption of operations.

The company has furloughed employees, and the management has taken steep pay cuts. During the quarter, the company drew down nearly $325 million in existing revolving credit facilities. In April, AMC issued $500 million in notes.

AMC Price Action

AMC shares traded 4.84% higher at $6.28 in the after-hours session on Tuesday. The shares had closed the regular session 7.13% lower at $5.99.