US cinema chain AMC’s shares plummet 25pc on profit warning in latest setback to China’s Wanda Group

Troubled Chinese real estate conglomerate Dalian Wanda Group has received another setback after shares of its US cinema subsidiary, AMC Entertainment Holdings, plummeted 25 per cent on Tuesday after it issued a profit warning for the second quarter.

AMC Entertainment Holdings, the world’s largest movie theatre owner, said in a statement that it expected to report a net loss for the second quarter of 2017 of between US$178.5 million and US$174.5 million, or US$1.36 and US$1.34 a share, compared to net earnings of US$24.0 million for the second quarter last year.

After issuing the warning shares of New York listed AMC plummeted 25 per cent from US$20.8 to US$15 in after hours trading.

Dalian Wanda Group became AMC’s controlling shareholder after the Chinese company bought the cinema chain in 2012 for US$2.6 billion. Since then Wang Jianlin, the billionaire who controls Wanda Group, has been building up his own media empire with acquisitions in the UK and Sweden.

However, Wang’s dreams of a global media empire are in serious doubt after reports that mainland Chinese authorities are scrutinising Wang’s overseas transactions and have cut off his funding. China’s major lenders have been ordered not to provide any funding for Wanda Group’s six overseas projects.