Cineworld may need more money if doors close again

Cineworld may need more money if doors close again
New curbs could be a major setback after the Cineworld chain had reopened 561 of its sites around the world. (Reuters)
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Updated 24 September 2020

Cineworld may need more money if doors close again

Cineworld may need more money if doors close again
  • Cinema operator fears renewed virus restrictions as studios delay major releases

LONDON: Cineworld said on Thursday it might need to raise more money if it is required to shut its theaters again following fresh pandemic curbs, as the world’s second-biggest cinema operator swung to a first-half loss, sending its shares down 17 percent.

The British company, for which the US is the largest market, said it was in talks with lenders to avoid an impending loan default, and flagged risks to its ability to continue as a “going concern” as studios delay major releases and people stay away from theaters.

“If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity,” the company said.

Cineworld shares were down 17.5 percent at 42.3 pence in early trade.

New curbs could be a major setback after the cinema chain reopened 561 of its 778 sites. It had highlighted the strong performance of Christopher Nolan’s “Tenet” earlier this month, and had said it was looking forward to other big movie releases.

But Walt Disney on Wednesday postponed the release of superhero movie “Black Widow” and Steven Spielberg’s “West Side Story” until 2021 in another setback to cinema operators. “Mulan” also skipped most theaters and went directly to Disney’s streaming platform.

The world’s largest cinema chain, AMC, and Comcast Corp’s Universal Pictures agreed in July that the studio’s movies would be made available to US audiences at home after just three weekends in cinemas.

Cineworld Chief Executive Officer Mooky Greidinger, however, said his company would follow the usual route.

“Our policy regarding the theatrical window remains unchanged as an important part of our business model, and we will continue to only show movies that respect it,” he said in a statement.

The cinema operator posted a pretax loss of $1.64 billion for the six months ended June 30, from a profit of $139.7 million last year as its cinemas were shut from mid-March until August. 

Saudi private sector rebounds with growth at 10-month high

Updated 04 December 2020

Saudi private sector rebounds with growth at 10-month high

Saudi private sector rebounds with growth at 10-month high
  • Steep rise in sales and growing business confidence spark jump in purchasing, hiring activity

RIYADH: Business activity in Saudi Arabia has risen to its highest level since January this year, showing the Kingdom’s economy is beginning to overcome the worst effects of the coronavirus pandemic.

According to IHS Markit’s Purchasing Managers’ Index (PMI) Survey, the acceleration of output growth in the Saudi economy in November was driven by a steep rise in sales and strengthening business confidence.

The survey found that input purchasing rose, while employment growth also returned for the first time since January. Input cost inflation also quickened, leading to a stronger increase in average output charges.

The index has now registered above the 50.0 no-change mark for three months in a row, highlighting a sustained recovery after the economic downturn due to the pandemic.

The Saudi PMI rose to 54.7 in November from 51 the previous month — the strongest improvement since January. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared with the previous month, and below 50 an overall decrease.

Both domestic and foreign sales rose last month, marking only the second upturn in new export orders since February.

Business confidence for the year ahead also improved notably during the month. In particular, firms were encouraged by the Saudi government’s easing of lockdown curbs and news of a breakthrough in the development of a vaccine.

Accelerated rises in output and new orders led Saudi firms to sharply expand purchasing activity during November. In addition, hiring activity turned positive and a number of companies linked increased employment to rising demand.

Commenting on the latest survey, David Owen, an economist at IHS Markit, said: “A third successive rise in the Saudi Arabia PMI pointed to an economy getting back on its feet in November. Supported by output and new business growth reaching 10-month highs, the data suggests a strong end to the year for the non-oil private sector. Notably, employment started to rise, while business confidence strengthened in the wake of encouraging vaccine news and sharper demand growth.”

Saudi economist and financial analyst Talat Zaki Hafiz told Arab News: “The improvement is due to many factors, such as the reopening of the market with the ease in lockdown and, finally, the lifting of the curfew. The return to normality has had a significant impact on private sector performance.”

Hafiz added: “Things will get much better by the next year. We have also noticed an improvement in oil prices recently and this will improve things significantly.”