AMC earnings call7 Aug 2020 22:26
Just listened to the AMC earnings call. Very reassuring sentiment for AMC investors. There was a lot of commentary which is potentially also relevant to CIneworld. These quotes are from the transcript.
On Food & Beverage Spend:
"And as of today, we have 184 theatres open internationally. We now have theatres open in every country where we operate abroad. It’s very early days, but the initial results from our international locations are encouraging, particularly with respect to food and beverage spend per person, which is holding up nicely and actually running well ahead of last year."
On Attendance:
"We’re also especially encouraged by the performance of a local language sequel that just opened in Spain. The sequel this year is actually driving more box office revenue, even in these coronavirus impacted times than the original did last year. And the original was the single highest grossing domestic film in Spain in 2019."
"Hopefully, this is a harbinger of what can occur when new Hollywood titles are released in the U.S. and overseas starting later this month. But with virtually no revenue generated in the second quarter, our bottom line financial performance in the second quarter is almost irrelevant. What is crucial is how we performed against our priorities, namely the preservation and enhancement of liquidity, the reduction of debt and the management of our expenses."
On Lease Liabilities:
"Our strong and long-term landlord relationships remain the foundation upon which we have successfully been able to defer or abate the vast majority of rent owed during the second quarter. Currently, we have over 900 distinct theatre leases and we have already reached agreements on approximately 75% of our leases to defer or abate rent. Each agreement is unique, but you should note that in the second quarter, the vast majority of the rent expense shown on the face of the income statement has been deferred with repayment terms mostly around 24 months, although, a number of agreements have repayment periods that extend through the remaining lease term, which in some cases is in excess of 10 years."
On whether they are better off open or closed currently:
"The real question is, are we better-off open or closed? And by our calculation, if were more than about 25% of last year’s volumes. We’re better off open than shut. Because the theatres would be cash positive. They may not be generating as much EBITDA as they degenerated if we were had last year as a attendance level. But there’ll be generating contribution to overhead, contribution to landlord rent, payments."
On Tenet:
"I would be really remiss if I just didn’t say the word Warner Bros., because I think Warner Bros. is doing something heroic for the exhibition industry by releasing Tenet in a few weeks, assuming it doesn’t slip, but sounds pretty good for a Labour Day weekend."
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