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I don’t think that I am an idiot! Everybody is frustrated including myself. I understand. Mooky and his team since the beginning of the pandemic did:
Negotiate with landlords
Talk with investors to borrow more money
Talk with the studios for at least 45 days window
Talk with investment banks to hedge Cine against the rise of interest rates
Identify which cinemas were losing money or not performing well and get of rid them
Monitoring the cash of Cine
Decreasing massively the CAPEX
Investing in building only 4DX and IMAX with better profit
Talking or dealing with suppliers to have enough popcorn
Dealing with his lawyers for Cineplex still working on it
The stock price is still low very low I agree but how do you value (one of the biggest factor) the SP. It’s the free cash flow to equity. It was negative for H2 2021 even with Bond, Spider Man. I think that the free cash flow to equity will still be negative (or break even) for 2022. Cine will make money in 2023/2024. This is why they need to get waivers and need to keep cash in hand as much as possible to survive until the end of 2023.
Look at the price of airlines they are in the same situation. Break even in 2023 profit in 2024. IMO
Adam Aron is 67 so almost the same age as Mooky. If your neighbour owe you money and you see him buying a Ferrari you will ask for your money with interest. But if your same neighbour has nothing for himself will you ask him to pay you back the entire money? Or make a deal?
Don’t you think that we need to seem a losing company until the outcome for the appeal?
Thanks god they are hedged with swaps and other derivatives
Hi Hussartbr, hope you are well.
I agree with you that the growth rate in the B.O. as of 2022 is impressive for the 6 first months because remember that cinemas were closed during the same period last year.
However, in terms of forecasting 2022’s results for Cine I think we should base our calculation to the H2 2021 results.
The B.O. for H2 2021 was at c. $3,435m and the results was at $1512m.
As of today the B.O. (2022) is at $3,147m so $288m down from H2 2021. But the month isn’t finished and I expect the month of June to reach $1bn. So we can forecast the B.O. for H1 2022 somewhere at $3688m. So c. $250m better than H2 2021. And now we can estimate the Revenue for H1 2022 to be at $1650/1700m with an Adj. EBITDA of $520m. If we consider H2 2022 same as H1 2022, then the whole Revenue of Cine for 2022 would stand at $3300/3400m and not $4800m as you mentioned. As I have access to Bloomberg their forecast for 2022 stands at $3800m.
I am happy for others to give their opinion too.
What I do like with Adam Arons is that he is proactive.
I would to see Mooky doing the same on twitter…
I missed you Jungle79 :) hope you hold it tight
$745m I’m the B.O. for June is needed to match H2 2021. It looks like we will surpass the billion mark for June so $300m more than H2 2021. If you add the increased of the ticket price we could have a revenue for H2 2022 at $1,600/1,800m which is not bad at all.
I agree Bonkers it’s all related to the whole market.
War in Ukraine, inflation, the BoE wants to hike the interest rate to put it higher than 1% for the first time since 2009.
But I am comfortable with Cine honestly went to Cineworld Leicester with my wife on Saturday to watch Top Gun there were no empty seats not one. I was queuing at the toilet. So relax the whole market will go down and unfortunately a cycle like that will last 12/18 months. We need to wait but bear in mind that Cine is making money
I disagree with you Giantsquid. Think about it we have $10bn debt that lenders are waiting Cine to be paid back. Having a positive cash flow for H1 2021 with a better revenue for 2022 and lenders are seeing that Cine is able to pay back thanks to people who return to the cinema. So do you think in your opinion that lenders will let Cine to collapse knowing that the loss given default for them would stand at 80/90%? So if you are a lender you will sit to 10bn$ just because of a $900m additional debt?
That’s right shazabo. This is why it is fine me important to see June having more than 745m$ in B.O. to have a revenue better than H2 2021. And hopefully having a positive cash flow to equity
Is it for H1 2022?
So instead of the 10th of August?
https://www.cnbc.com/2022/06/10/goldman-downgrades-netflix-to-sell.html
Hold your breath. The SP is a really joke at the moment.
Pardon me Metom but it’s not about revenue or cash flow it’s about dignity. As a french I remember the 13th November 2015 attack and Charlie Hebdo. Our culture is based on freedom of expression and this need to be respected by all. I agree we are not losing a lot of money on that but we lose our dignity…
It’s a good marketing for Cine
The Free cash flow is the cash flow after tax remaining for both Bondholders and Shareholders which was positive $26m for H2 2021. The Free Cash Flow to Equity is the remaining cash flow after paying interest and debt to Bondholders so it’s the remaining cash for Shareholders.
What is interesting is that the valuation of the share is based on the free cash flow to equity which was negative for the last result. So I think one of the main factor that will drive the SP up apart the positive outcome of the judgement is the FCFE. The question is will it be positive for H1 2022? We need to know if the margin of Cine increased and by how much they decreased the CAPEX -$101m hopefully they can decrease it to $50m.
There is an important point as well is the interest rate on our debt (I know you already mentioned). The $3.225bn from Barclays Bank with a coupon rate of US0001M + 250bps. The end of 2021 the US0001M was at 0.1013% now it’s at 1.093%. And the US Federal Reserve wants to increase the rates at least 6 more times.
I know why the SP is down and very low that was not the debate. What I meant is that the correlation within a sector is higher than the whole market. The SP is down because they’re is too much uncertainty the Plex case and if people will return to theatre again. I have access to Bloomberg and reading frequently all the articles related to Cine. Few months ago they were saying that due to streaming for the long term they were seeing a recovery of 70% compare to 2019. And now they are saying 85/90%. People like analysts and studios were all surprised with Top Gun there is an article in the FT on that. The most important thing is if we can generate cash during this period of risk - the answer is yes. And I believe that there is a strong relation with having positive cash flow and the preservation of Cine no matter the outcome.
Giant squid if you had passed the CFA or FRM you would have learned that the correlation within a sector is much higher than the correlation for the whole market. Stating that we are within the Leisure, Entertainment sector - so yea we will be impacted more than other sector due to this rule.
Hi Hexam, hope you are well. Thanks for the link I understand now. I think what the article means is the positive free cash flow of $26m as the interest payment can be restructured or negotiate with the lenders. I am surprise that they paid tax of $3m as they had negative results. They need to decrease their Capex even it’s difficult as they need to increase the quality of Regal theatres compare to AMC. The Board said that they really need to manage very well the cash meaning that they need to decrease the Capex and to decrease the rent with landlords. It’s all doable.
Yes hopefully we can have a very good month for June and we can be positive.