Regal Cineworld Gets Debt Rating Upgrade From S&P Global
Regal Cineworld has earned a debt ratings upgrade from S&P Global Ratings, with its analysts citing the Hollywood box office recovery to sustain continuing debt reduction efforts.
The debt ratings firm raised Regal Cineworld to “B” from “B-,” with a stable outlook for company growth post-pandemic and post-bankruptcy. The company, which operates the Regal Cinemas chain in the U.S. market, is also expected to continue bolstering its balance sheet as cinema ticket sales and overall cost-cutting continues.
“The stable outlook reflects our expectations that box office recovery, favorable ticket pricing, and tight control over operating costs will help Regal Cineworld’s adjusted EBITDA margin approach 30 percent and support its FOCF (free cash flow to debt ratio), such that FOCF to debt after leases will be breakeven in 2025 and turn sustainably positive from 2026,” S&P analysts said in their May 28 report.
The debt rating upgrade follows Disney’s Lilo & Stitch and Tom Cruise’s latest Mission: Impossible movie for Paramount and Skydance fueling the biggest Memorial Day weekend of all time.
“We anticipate that the strong slate of film releases planned for 2025-2026 will support a further recovery of global cinema admissions, as well as Regal Cineworld’s box office revenue and EBITDA,” the S&P Global report added about the exhibition giant’s operational and financial performance for the rest of the year and into 2026.
That leaves the second-biggest movie cinema chain behind AMC Theatres apparently clear of the pandemic-era cliff before Regal Cineworld lightened its debt load post-bankruptcy and began riding Hollywood’s box office recovery. Regal Cineworld CFO Thomas Song welcomed the S&P Global upgrade in underscoring his company’s efforts to bolster its balance sheet and improve its moviegoing experience for customers.
“This also demonstrates our commitment to lowering our interest costs, strengthening and building a more resilient balance sheet for the long run. We are pleased with this recognition and remain committed to driving significant value creation for our stakeholders,” Song added in a statement.
But while back on its feet, Regal Cineworld and the rest of the global exhibition sector are still down in box office revenue compared to the pre-pandemic era. Regal Cineworld operates the Regal Cinemas, Cineworld, Picturehouse, Planet and Cinema City brands, with theaters beyond the U.S. in the UK and across Europe.
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