America’s largest theater chain AMC entertainment has posted third-quarter losses of $42.7 million, compared to a $30.4 million profit in the same quarter last year, a revelation that will further concern the entertainment industry.
“We have been predicting weakness in the third quarter industry box office, due to the quantity and subject matter of the films that were scheduled to be released,” said AMC CEO Adam Aron, in a statement. “Not surprisingly, our foreshadow was accurate.”
“In a high fixed-cost, low variable-cost business, this has led to lower EITDA [Earnings before interest, taxes, depreciation, and amortization] for AMC in the third quarter of 2017,” he continued.
AMC Shares plunged by around 9 percent on the news despite beating expectations, although have now stabilized around the 12 dollar mark.
The losses coincide with falling ticket sales in 2017, with the North American box office remains down 4.8% for 2017. Summer theater attendance hit a 25-year low. However, Aron remained optimistic about the company’s future financial prospects.
“Among many other hit films this year, movies like It in September, Thor: Ragnarok in November and soon Star Wars: The Last Jedi in December, demonstrate for all to see what we know to be true,” Aron said. “When Hollywood and international movie makers offer appealing movies, Americans and Europeans will pour into our theatres in huge numbers and pay top-dollar to do so.”
He continued:
In our view, the weakness of the summer box office is not indicative of a long-term trend, especially immediately after two and a half years of record box office performance and just before what we expect will be strong and robust consumer demand through year end. We are similarly confident and excited about the film slate that is coming in 2018 and again in 2019. Accordingly, we remain optimistic about the viability and strength of the movie theatre industry generally, and of AMC specifically.
In August, AMC also announced a “shocking” second quarterly loss of $178.5 million and unveiled a cost reduction plan, causing shares to fall by 25 percent. The company remains the world’s biggest movie exhibition company, with a total of 1,006 theatres and 11,046 screens.
The news is likely to increase pressure on Hollywood to perform at the box office, amid falling audiences and industry mistrust, intensified by the current sexual abuse scandal engulfing the industry.
Follow Ben Kew on Facebook, Twitter at @ben_kew, or email him at bkew@breitbart.com.
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