AMC posts narrower loss, but CEO says there are still pandemic challenges ahead

AMC posts narrower loss but still faces pandemic challenges

November 10, 2021: -On Monday, AMC Entertainment shares decreased over 5% in extended trading even though the movie theater operator posted a third-quarter loss that was narrower more than expected.

“Our financial results continue to improve,” CEO Adam Aron said on Monday. “One can see that our industry and our company are on a path of recovery and improvement. Although, even amidst such good news, we are not yet where we want and need to be.”

The company’s stock initially popped after the results were released. Although, shares soon reversed directions as investors saw more challenges ahead. AMC shares are at the center of this year’s meme stock craze, skyrocketing over 2,025% in 2021.

AMC said that all of its domestic cinemas were open on September 30, as were 99% of its international theaters. The company says that 40 million guests viewed films in the third quarter, up from 22 million in the second quarter, thanks to new blockbuster titles like “Shang-Chi and the Legend of the Ten Rings” and “Free Guy,” and increasing vaccination rates.

The company is seeing admission revenue surge to $425.1 million from $62.9 million in the year-ago period. Its food and beverage sales also surged to $265.2 million from $29.1 million on a year-by-year basis.

Still, AMC’s operating costs outpaced its revenue, which led the company to post a loss for the quarter.

“We wish to emphasize that no one should have any illusions that there is not more challenge ahead of us still to be met,” Aron said. “The virus continues to be with us, we need to sell more tickets in future quarters than we did in the latest quarter, and adjusted EBITDA is still well below pre-pandemic levels.”

AMC had over $1.8 billion in liquidity at the end of the third quarter, including cash and undrawn revolving credit lines. Aron said the company does not anticipate borrowing under those credit lines in the next 12 months.

This liquidity has allowed AMC to explore new revenue streams. The company has acquired new theater leases, begun offering unique content, like concerts and sporting events, and expanded into the popcorn retail business.

The company said that it would be looking to offer new payment options such as bitcoin. On Monday’s earnings call, Aron said that AMC continues to look at other cryptocurrencies it can accept and has spoken with third parties about launching its cryptocurrency.

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AMC posts narrower loss, but still faces pandemic challenges
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AMC posts narrower loss, but still faces pandemic challenges
While the movie theater operator posted a narrower third-quarter loss than expected, AMC Entertainment shares declined over 5% in extended trading.
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The Women Leaders
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