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AMC to Report $2 Billion+ Loss

Photo by NomadSoul1 on Envato Elements

AMC to Report $2 Billion+ Loss

By Allyson Vannatta, Senior Writer

AMC Theaters, the largest theater chain in America, expects to report a loss between $2.1 billion and $2.4 billion for the first quarter in 2020 due to coronavirus shutdowns.

During this same time period of 2019, the net loss for the company was only $130 million, according to Polygon.

The theater chain hoped to open up sometime in June, but with no new movies on the schedule to get moviegoers excited to return, it looks like they’ll have to wait a bit longer to get up and running.

The longer they stay closed, though, the harder it will be for them to reopen.

“We believe we have the cash resources to reopen our theatres and resume our operations this summer or later,” said AMC.

AMC continued, “If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all.”

Aside from the loss of billions of dollars, the company isn’t overly optimistic about what the future holds for theaters even when they’re able to open their doors.

In an SEC filing announcing preliminary earnings, AMC Theaters said:

“We believe, but cannot guarantee, that the exhibition industry will ultimately rebound and benefit from pent-up social demand for out-of-home entertainment, as government restrictions are lifted and home sheltering subsides. However, the ultimate significance of the pandemic, including the extent of the adverse impact on our financial and operational results, will be dictated by the currently unknowable duration and the effect on the overall economy and of responsive governmental regulations, including shelter-in-place orders of the pandemic and mandated suspension of operations.”

As of now, AMC Theaters hasn’t announced any plans to open their theaters. However, it sounds like they’re doing their best to put together a safety plan that won’t hurt them in the long run.

Related: Cinemark Theaters Set to Begin Phased Reopening Starting June 19

“If we do not respond appropriately to the pandemic, or if customers do not perceive our response to be adequate, we could suffer damage to our reputation, which could significantly adversely affect our business,” AMC said.

“Even once theatres resume operations, a single case of COVID-19 in a theatre could result in additional costs and further closures, or a ‘second wave’ or recurrence of COVID-19 cases could cause another widespread suspension of operations.”