AMC Theatres doubts recovery after revenue drop due to coronavirus

AMC Theatres doubts recovery after revenue drop due to coronavirus
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AMC Theatres said Wednesday that it has “substantial doubt” it can remain in business after shutting down its theaters globally due to the coronavirus pandemic.

The world’s biggest movie theater chain estimates that it lost between $2.1 billion and $2.4 billion in the first quarter, according to a regulatory filing obtained by CNN Business.

AMC reported its revenue dropped to $941.5 million in the first quarter, a 22 percent decrease from 2019’s first quarter.

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The chain expects even worse drops in the second quarter, as the filing said, “We are generating effectively no revenue.”

The company said it is following the loosening of restrictions in various governments, but studios may delay their films until they are more likely to get viewers in theaters. 

"Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations," the company said in the filing, according to CNN Business.

AMC reported it has a cash balance of $718.3 million as of April.

"We believe we have the cash resources to reopen our theatres and resume our operations this summer or later," AMC said. "Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues."

The coronavirus pandemic shut down movie theaters around the world after theaters were seeing the lowest ticket sales in more than 20 years. 

The closures prompted studios to delay the release of some of the year’s biggest movies. Some studios decided to bypass releases in theaters for a digital release, including Universal with “Trolls: World Tour.” 

Universal’s decision prompted a feud with AMC, resulting in the theater chain banning Universal films from its theaters, according to CNN Business.