Imax Swings to Loss, But Points to Box Office Recovery in China and Japan

Beijing Wanda Imax Theater
Imax China

The exhibitors screens in Japan raked in $26.8 million from 'Demon Slayer' and the October National Holiday grosses jumped 25 percent over 2019 in China.

Imax posted lower revenues during its fourth quarter, compared to pre-pandemic 2019, but an Asian box office resurgence helped the giant screen exhibitor offset a continuing hit to its North American theaters from the COVID-19 crisis.

On Thursday, Imax reported a loss attributable to shareholders at $21.2 million, compared to a year-earlier profit of $18.2 million, and the adjusted loss per share was 21 cents, compared with a 35 cents-per-share profit in 2019.

Overall quarterly revenue was $56 million, against $124.3 million a year earlier. During the most recent quarter, Imax, while held back by tentpole release delays and North American movie theaters operating at reduced capacity, saw big gains from the resurgence of the Asian film industry.

Imax raked in $26.8 million from Demon Slayer playing on its screens in Japan and had a strong National Day Golden Week holiday period in China. "As the world’s only global blockbuster entertainment platform, we are encouraged to see that audiences are eager to return to the movies where the virus is under control and they feel safe, and this promising trend is reflected in our consistent financial improvement since the start of the pandemic," Imax CEO Richard Gelfond said in a statement.

The latest Imax results will be weighed by North American exhibitors as they look to a box office rebound in their own movie theater circuits post-pandemic, either later this year or in 2022, from pent-up consumer demand.

Gelfond told analysts during a conference call after the market close that the continuing vaccine rollout and a slate of Hollywood tentpoles set to reach the multiplex later this year and into 2022 bode well for the exhibition industry. "We believe the world will look very different in a few months. In light of this progress, we continue to see much promise in the second half of the year," he argued.

Gelfond was asked how the COVID-19 crisis might have a lasting impact on movie viewing post-pandemic. "Consumer behavior is not going to change in a material way," he told analysts as the Asian box office rebound underlined how people returned to the multiplex when they felt it was safe to do so.

"When they can go out, they will go out," the Imax boss said of moviegoers and other consumers when pandemic lockdowns lift. Gelfond added the concept of pent-up demand for movie-going was real.

"When you look at other territories that opened like China and Japan, it wasn't a switch, it was a faucet, and you need to prime the pump along the way," he told analysts. As the pandemic faded and Americans no longer felt the need to shelter in their homes, Gelfond predicted a resurgent box office in North America as well.

"The U.S. is getting a safer feeling pretty quickly and that's going to even accelerate. We just all have to be patient and be ready and plan our strategy to market to that change and make sure we sequence the right films," Gelfond insisted as he looked to a continuing domestic industry reopening.

To shore up its balance sheet amid the pandemic, Imax said it sold its strategic stake in Maoyan, a major Chinese ticketing platform, for $17 million.  Imax acquired the stake two years ago to partner with Maoyan and learn about the marketing, publicity, distribution, and digital remastering of their film slate.