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Cineworld Revenues Down, Backs FY19 View; To Sell And Leaseback 17 US Cinemas

Cineworld Group plc (CINE.L) reported Wednesday that revenue for the period January 1 to May 12 declined 9.4 percent from last year with weak results in US and UK & Ireland regions, as well as Box Office and Retail segments. Looking ahead, the company said it is on track to perform in line with expectations for the year.

In its trading update, the company said its trading is in line with expectations. As anticipated, revenue performance was softer due to the difference in timing of major releases.

Regarding the future, Mooky Greidinger, Chief Executive Officer of Cineworld, said, "We are confident that the strong film release line up in the balance of the year, which includes highly commercial titles, such as "Lion King", "Frozen 2", and the most anticipated movie of them all "Star Wars: The Rise of Skywalker" will enable us to achieve results which meet our expectations for the full year."

Separately, the company announced the signing and completion of a $286.3 million sale and leaseback of 17 US-based multi-screen cinemas, totaling 251 screens.

Under the deal, Cineworld would sell the cinemas to subsidiaries of Realty Income Corp. and leasing them back under 15-year leases on customary terms.

The cinemas had a book value of $240 million at the end of 2018, and generated EBITDA of $42.5 million in 2018.

Cineworld intends to use the proceeds from the deal to reduce net debt.

Further, Cineworld announced that it is in discussions with a separate party regarding a potential sale and leaseback transaction involving a further 18 US-based multi-screen cinemas totaling 255 screens. The proposed deal is for a similar consideration and on similar terms.

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