AMC Theaters is churning cash at a rate that makes it look as though the chain could be in trouble within the next six months.
Since the coronavirus pandemic began to take hold, movie theaters have had a rough time of it. Despite the fact that they are now reopen in many locations around the U.S., a lack of films to show, reduced audience sizes, and no end in sight, has led to more financial issues for theater chains.
In particular, AMC Entertainment seems to be having a really tough time of it, and it’s about to get a whole lot worse.
“Given our expectations for a high rate of cash burn, we believe the company will run out of liquidity within the next six months unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve,” S&P Global Ratings said in a statement.
With the latest news that No Time to Die moving to 2021, the year has gotten even tougher for cinemas. While AMC has the ability to leverage various cash sources, there are smaller theater circuits that don’t have that luxury It seems inevitable at this moment that we will see some theater locations closing in the coming months.
For the time being, AMC is going to need to explore those other avenues of raising capital, and it’s going to need to do it soon. As the movie industry enters 2021, it appears we will be facing a very different cinematic landscape.