Imax Posts $2.9M Loss Despite Strong Box Office Quarter

Giant-screen exhibitor Imax posted higher second-quarter revenues as a pandemic-era recovery in its North American box office was led by business from Tom Cruise’s Top Gun: Maverick release.

Imax disclosed global box office of $247.7 million in the quarter, up 128 percent compared to the same period of 2021, helped by box office for other titles like Doctor Strange in the Multiverse of Madness and Jurassic World: Dominion.

Overall revenue jumped 45 percent to $74 million, and Imax shrunk its net loss attributable to shareholders to $2.9 million, or 5 cents per-share, compared to a second quarter loss of $9.2 million, or 16 cents, in 2021. The second quarter adjusted net income line included a $3.2 million charge for an impairment on a film investment, due in part to COVID related lockdowns and “depressed” box office levels in China, the company said. Imax also recorded a second one-time charge of $5.1 million for a valuation allowance against its deferred tax assets.

During the second quarter, COVID-lockdowns in China greatly reduced the box office behind Imax’s latest results. “The environment in China remains challenging, but we are beginning to see some early encouraging signs,” Imax CEO Richard Gelfond told analysts during a post-market call.

Gelfond pointed to Jurassic World: Dominion grossing over $145 million in China, and Chinese authorities giving approval for The Batman, Fantastic Beasts and Ambulance to play in China. But he cautioned: “There’s no question that the bar for approval remains higher right now, given the broader issues between the West and China.”

Analysts are looking to see if Hollywood movies return to China in strong pre-pandemic box office numbers after the current spate of COVID lock-downs in that country ends and the threat of censorship and political instability ebbs. Gelfond forecast the upcoming Avatar 2 release will get into China, given the relationship director James Cameron has with that market.

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“The logjam will likely open up after the election,” he added of Hollywood movies bidding to get onto local screens as Chinese President Xi Jinping looks to stay in power for a third term at the upcoming 20th Party Congress.

Imax also has 15 local language films set to play on its screens in China, South Korea, Japan and India in the third quarter of 2022, Gelfond told analysts as the company looks to remain agile until conditions in Asian markets allow the return of Hollywood movies in big numbers.

Imax’s digital remastering revenues came to $27.6 million during the latest quarter, up from a year-earlier $11.7 million. Strong openings for studio tentpoles during the second quarter underlined Imax’s rising profile as a platform for Hollywood to eventize blockbuster releases as its giant screens draw premium ticket prices.

Imax also said its domestic box office during the second quarter rivalled its performance in its record-breaking 2019. North American box office for the second quarter was on par with the second quarter of 2019, with June 2022 even surpassing June 2019, Imax reported.

Imax added its domestic market share during the most recent financial quarter was 5.3 percent, and in May alone the company captured 7 percent of the North American box office.