Earnings AMC Hiburan squeezed by soft Q3 slate – deadline

UPDATED with conference call commentary: AMC Entertainment CEO Adam Aaron shrugged off Covid, streamers and windows as a real problem for current exhibitions, saying the biggest challenge facing the industry “above all, is that cinema operators need more films.”

“At this point, there’s only one topic that should be … on the tip of all tongues,” he said on a conference call Tuesday after reporting quarterly earnings. Studios are doing what they can to “accelerate the pace” and there is “considerable progress,” but the number of films is still down 20%-30% from pre-pandemic levels.

He said, “the box industry around the world is on the rebound both domestically and globally, clawing and climbing its way back.” He is anticipating this weekend Black Panther: Wakanda Forever will be his biggest release the year after Top Gun: Maverick and that the 2022 box office will be close to 75% of pre-pandemic levels. Next year should grow by 15% to 20%, maybe more, he said.

Meanwhile, the exhibitor continues to announce new projects rolling out next year including an AMC-branded credit card on the way in the first quarter; AMC Perfectly Popcorn on grocery store shelves in the first half; and the recently announced cross-market Zoom Room for businesses in partnership with the online meeting powerhouse. The company is investing in new laser projectors and large-format screens and keeping some dry powder for more theater acquisitions.

Aron noted AMC Stubs A*List’s three-movies-a-week loyalty program has rebuilt between 600,000 and 700,000 members, “up from zero during” Covid, and the company plans to be “very aggressive” in pushing the plan. He does not plan to invest in AMC On Demand. “It’s always had a low usage and to be honest, even though it’s a nice little product, I think our money is best spent elsewhere… on rare occasions.”

“We are looking to either phase out AMC On Demand or partner with other parties to offer the same capacity to our guests.”

Previously: Giant theater chain AMC Entertainment saw revenue rise and losses widen slightly last quarter, but CEO Adam Aron said a stronger slate is ahead with debt reduction, capital raising and new projects.

Sales of $968 million for the quarter ended in September compared with $763 million for the 2021 period. The net loss was $226 million versus $224 million. EPS was flat at 22 cents a share.

Operating cash burn for the quarter was a negative $179.2 million. And available liquidity as of September 30 was $896 million, including $211 million of undrawn capacity under the company’s revolving credit facility.

Attendance for the quarter was around 53.2 million, with 38.3 million in the US, on more than 10,000 screens.

Operating expenses rose, passing $1 billion from more than $900 million in the previous quarter.

“As anticipated and reflected on our last quarter earnings call, our third quarter results were impacted by very soft industry box office in the final two-thirds of the third quarter of 2022, but encouraged our overall per-patron metrics for both admissions revenue and food spending and beverages remain above pre-pandemic levels, increasing by 12% and 30% respectively, compared to the third quarter of 2019,” said Aron.

“Our recovery continues, and we look forward with enthusiasm to a stronger film return in the fourth quarter of 2022, which has started strongly with the release Black Adam.” Successful blockbusters include the upcoming weekend Black Panther: Wakanda Forever, Exotic World and Avatar: Water exit.

Exhibitors said it was bolstered by recent capital market activity, particularly debt reduction, debt refinancing, and equity capital increases. “These actions strengthen our agility and allow us to pursue strategic opportunities, such as the recently announced Zoom Rooms at AMC, to transform our company in a post-pandemic environment. We expect to make more business development announcements in the coming weeks and months, accompanied by movie theater sector that enhances AMC Entertainment’s position to create value for all of our stakeholders,” said Aron.

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