Share prices for top movie theater chains – including AMC Theaters and Imax – have risen in the wake of a strong global box office launch for Illumination and Universal’s Nintendo video game adaptation The Super Mario Bros. movie.
AMC Entertainment Holdings, the parent company of AMC Theaters, the world’s largest movie chain, saw its share price rise 35 cents, or just over 7 percent, to $5.25. And shares in Imax — whose giant screens allow exhibitors to charge a premium ticket price — rose $1.05, or just over 5 percent, to $20.85 as the Super Mario Bros. pic scored the all-time best opening for an animated film with $375.6 million in worldwide ticket sales, according to the final figures.
Movie fans rushing to movie theaters in record numbers for an animated picture this weekend had credit rating agency Fitch touting box office recovery for debt-laden movie chains looking to shrug off the impact of pandemic disruption on their debt service, even if they went back. coming to pre-COVID crisis credit ratings won’t happen anytime soon.
“We expect movie theater attendance to continue to recover on a sequential basis, driven by greater comfort in external environments, wider movies accessing theatrical releases, including the return of video streaming studios to theatrical release and distribution, growing at a mid-to-low single numbers throughout the assessment horizon,” Fitch said in a report Monday. “However, our ratings projections do not assume visitor numbers will return to historic levels over the rating horizon.”
Shares in Cinemark Holdings rose 97 cents, or nearly 7 percent, to $16.21, while Canadian movie theater chain Cineplex also saw its stock rise 34 cents, or nearly 5 percent, to $6.89 (in US dollars).
Shares in Regal Cinemas owner Cineworld did not trade on the London Stock Exchange on Monday due to the Easter Monday holiday for the UK financial exchange. Cineworld said earlier this month it had reached an agreement with lenders that it would emerge from Chapter 11 bankruptcy through restructuring in the first half of 2023, though that process could be delayed.
Despite that improving credit picture for Cineworld and other major movie theater chains, Fitch warned that the Hollywood box office’s return to the doldrums would complicate the recovery of major exhibitors.
The theater industry’s “credit profiles and ratings could remain under pressure if attendances fail to reach expected levels, limiting issuers’ ability to rebalance,” the rating agency argued.
