IMAX Returns To Profit In China Amid Box Office Recovery

IMAX China, the Hong Kong-listed subsidiary of Canadian-American film technology supplier IMAX, said on Monday its business was once again profitable in China in 2021 after Covid-related losses in 2020.

IMAX China expects net profit for the 12 months to Dec. to range between $37.5 million to $39 million, compared with a net loss of $27 million in 2020.

The company in July said net profit in the first six months of last year reversed to $19.2 million, compared with a loss of $35.2 million in the first half of 2020. More than 90% of IMAX’s theaters in China, the world’s most populous country and second-largest economy, were open as of the year of June, IMAX China said at the time.

For 2021 as a while, IMAX China attributed results were boosted by a recovery in box office receipts and an increase in IMAX theater system installations compared with 2020. (See announcement here.)

China had the world’s largest box office take last year, with revenue of about $7.37 billion, according to an Xinhua News Agency report in January that cited China Film Administration figures.

“You’d be a fool to underestimate the role of China – its 1.4 billion people, its increased demographics, its increased quality of film, its increased budgets, its increased box office,” IMAX CEO Rich Gelfond said at the 3rd annual U.S.-China Business Forum held online and organized by Forbes China last August. “In the modern world, money has a lot to do with trends.  The increased buying power, increased consumer demand and increased supply has to mean that China is going to play a larger role in the entertainment ecosystem.” (See related post here.)

IMAX started doing business in China in the 1990s by producing science-related documentaries used as education and learning tools; success came in part by working closely with government partners.  IMAX’s first customer in the country was a Shanghai government organization; its first picture was “China: The Panda Adventure.” 

IMAX shares rose 4.3% to in New York today to $18.07 after the earnings report was posted. Hong Kong-traded IMAX China lost 2% in Hong Kong yesterday following the news.

IMAX China listed at the Hong Kong Stock Exchange in 2015.

See related post:

China Is Deepening Interconnectedness Of Global Markets

China To Have Larger Role In Global Entertainment Industry, IMAX CEO Says