The coronavirus pandemic continued to be a drag on Imax’s earnings during the first quarter, but there were signs that a box office revival in Asia could foreshadow a major moviegoing return in the U.S. and other markets.
The exhibition company reported revenues of $38.8 million, an 11% bump from the prior-year quarter, as well as a net loss of $14.8 million, an improvement on the $49.4 million the company lost in the year-ago period. That amounted to a loss of 25 cents per diluted share. Imax attributed the loss to the impact of theater closures due to the pandemic, as well as the capacity restrictions that are still in place in many major markets. It couldn’t have helped the company that many of the Hollywood blockbusters that make its screens so popular with fans have been delayed during COVID-19. But the picture was brightened by the company’s performance in Asian countries such as China where moviegoing has resumed.
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“Asia’s just ahead of the curve in terms of reopening,” Imax CEO Richard Gelfond told Variety. “In China and Japan the box office results are consistent with pre-pandemic levels, if not better. That suggests that where people feel safe to return to movies, there’s a lot of pent-up demand.”
The loss was in line with analyst estimates, but Imax’s revenues fell just short of Wall Street’s projections. Analysts expected it to report $39 million in revenues.
The company said it had improved its cash position by raising $230 million of convertible notes, which gives it more than $200 million in available liquidity. It had $283 million in debt. Imax also sold its stake in Maoyan Entertainment, a Chinese online ticketing platform, for a $5.2 million gain.
The company posted its first year-over-year quarterly box office growth, with its $110 million in ticket sales primarily coming from Asia.
Gelfond argued that the deadly pandemic has made people aware of their own mortality and eager to get out of their homes and experience things. That’s good news for the travel and entertainment sectors.
“Before the pandemic, people put off doing things, but there’s a greater awareness that you can’t push things off indefinitely,” he said. “The uncertainty around tomorrow is a call for action today.”
Imax also announced that Patrick McClymont, its chief financial officer, will be leaving the company to become the chief financial officer of a private company.
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