Multi-national cinema circuit Kinepolis reported its Q3 results in the midst of another round of cinema closures across Europe, easing concerns about its financial state as the exhibition sector remains mired in the economic fallout of Covid-19.
Kinepolis operates 1,081 screens across 111 cinemas worldwide. In Europe, it oversees 56 sites across Belgium, the Netherlands, France, Spain, Luxembourg, Switzerland, and Poland. In North America, it operates Canada’s Landmark Cinemas (45 locations) and MJR Digital Cinemas in the United States (10 locations).
The circuit began its first reopening phase in July, with all European and most Canadian locations open by the end of the month. Its U.S. locations––branded under MJR Digital Cinemas––resumed operations in Michigan on October 9. By the end of October, however, Kinepolis had been forced to close all Belgian and French locations due to renewed Covid-19 restrictions. Nine additional locations––one in Granada, Spain, and eight in Canada––remain closed.
In the event of another worldwide cinema closure, Kinepolis claims it has enough financial resources to meet all its standing financial commitments for another 12 months without taking additional measures. The circuit states it counts with €127.3 million in available financial resources as of September.
The circuit registered 2.4 million admissions worldwide over the third quarter, resulting in a loss of €5.6 million in free cash flow. Admissions figures were down 75.9% from the same period in the previous year. Its net financial debt rose to €478.9 million from June’s €462.8 million (excluding lease liabilities), stemming from the cash loss and construction expenses for new sites.
“This global crisis is hitting us hard both directly and indirectly, on the one hand, because of the restrictive measures inside our cinemas and, on the other, because almost all blockbusters have been postponed,” said Eddy Duquenne, CEO of Kinepolis. “I remain positive about the future, as we are seeing that many movie lovers keep coming in spite of everything and feel safe inside the cinema. The fact that the studios are constantly postponing the vast majority of their films until a moment when they can secure their income, proves the importance and value of a cinema release. We are currently in pause mode, but the intermission of ‘this film’ is lasting longer than foreseen. Fortunately, Kinepolis is in good financial shape.”
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