AMC Entertainment Holdings Inc stated that there were 'substantial doubts' about the ability to continue the operating if the firm was forced to keep the theaters closed for a longer period due to the coronavirus or COVID-19 pandemic.
Movie theaters around the world have been shut down since mid-March to help to contain the spread of the deadly novel virus many potential box-offices draws attention as 'Top Gun: Maverick', the latest James Bond film "No Time To Die" and Walt Disney's "Mulan" have also been pushed later in the year.
In the United States, individual states are now considering when to allow businesses to reopen. "We cannot predict when or if our business will return to normal levels," the world's largest movie theater operator said in a regulatory filing.
AMC Doubtful About Operating
The company, which operated about 996 theaters and 10,973 screens globally as of end-March, also warned that it may not have sufficient liquidity to tide over until its cash-generating operations are back to normal. AMC said it had begun a ramp-up in cash spending as it aims for a summer reopening. The company had a cash balance of $718.3 million as of April 30, and has said it had enough liquidity to sustain the closures till the end of July.
However, the company raised fears that even after theaters reopen it may not have enough films to show and attendance will be further impacted as people may switch over to other forms of entertainment or be wary of health risks. Shares of the company fell three percent in trading before the bell. The company also said it expected to report a loss of between $2.12 billion to $2.42 billion for the first quarter ended March 31, largely due to an impairment charge of about $2 billion related to assets and goodwill.
(With agency inputs)