AMC, an American multinational basic cable television channel, a flagship property of AMC Networks, has been hard hit by the Coronavirus pandemic and is in dire need of cash.
On Monday, the world’s largest cinema chain reported an overall third-quarter revenue of $119.5millilon, down 91% compared to the revenue of $1.3billilon in the same period of 2019. Losses hit $905.8 million or $8.41 per share, compared to the 53cents per share loss in 2019.
In grappling with the financial impact of the pandemic, AMC noted in its earnings that it has raised more than $80 million by selling its Baltic theaters in Latvia, Lithuania, and Estonia.
AMC also noted it renegotiated its debts, theater leases, and reduction in interest payments and it was able to raise $900million in capital from new debt offerings and equity sales.
AMC also noted in its earnings that it’s “operating approximately 539 of its 600 domestic locations,” and around 261 of its 358 international locations are back in operation.
However, there is less attendance due to Covid-19 protocols, which means few paying customers and with the streaming world upon us, many prefer to stream than go to the cinema, more so as theaters have been closed in several European countries due to rising Corona cases.
- AMC president and CEO Adam Aron said in a statement: “The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third-quarter results, as theatre operations in the U.S. were suspended for nearly two-thirds of the quarter. And yet, despite unrelenting obstacles, the AMC team continued to make significant progress in pursuit of our three key priorities:
- To strengthen our liquidity position;
- To dramatically reduce operating and capital expenditures, and
- To continue to safely and successfully restore our operations.”
AMC is looking to offset the losses incurred during the pandemic, and they are looking at every possible means to get money. AMC president and CEO, Adam Aron said: “All we got to do is raise a little money and we’ll be just fine“. Last month, the company sold 15 million shares to secure $41.6million.
“We are currently seeking again to raise additional equity capital,” Aron added. According to a SEC filing published on Monday, the company is looking to sell up to 20 million Class A shares to generate up to $50million to raise funds.
The company is also considering venturing into streaming due to less attendance and few paying customers, Aron said “AMC is not stuck back in 1955. We are willing to consider alternate models…..We understand the world of streaming is upon us. We believe it optimizes our profitability and the studio’s profitability if they can have a combo of theatrical releases and streaming.“