AMC announced second-quarter earnings earlier this week, putting numbers to the dramatic impact of last year’s strikes by Hollywood’s writers and actors. Revenues fell by 31% compared with the second quarter of 2023, with net losses increasing from $8.6 million in Q2 2023 to $32.8 million in Q2 2024.
AMC CEO Adam Aron explained the disappointing results: “The prolonged actors’ and writers’ strikes of 2023 severely reduced the number of movies being released theatrically in the early months of 2024…This explains the weakness in our preliminary Q2 2024 results, as contrasted with the same quarter of a year ago.”
While Q2 earnings struck a sour note, AMC’s long-term prospects were brightened by a restructuring deal it agreed to with its major creditors. The agreement extended the maturity for $1.2 billion in debt, which is set to come due as soon as 2026. AMC’s creditors also agreed to retire $500 million in outstanding debt by exchanging it for company shares.
AMC has been struggling under billions of dollars in debt since the pandemic forced the closure of hundreds of its theatres for extended periods, cratering revenues and increasing cash burn. However, the exhibitor has deftly chipped away at its debt by raising money through new shares issued to retail investors who rallied to support the iconic theatre chain at the height of the pandemic. In addition, AMC was actively re-negotiating its lease terms with many of its landlords.
Aron explained that the extension of its debt would give the company a sufficient runway to be able to complete its turnaround. “We continue to be confident that industry-wide movie revenues for the second half of 2024, and into 2025 and 2026 will continue to show increasing strength.”
