IMAX China Holding, Inc. (NYSE: IMAX) today reported full-year 2020 results highlighted by second-half box office which returned to 80% of the prior year period on an average daily basis, and continued network growth as theatres reopened in late July. Greater China revenue for the full-year 2020 was approximately US$52.3 million, down 58% year-over-year, and adjusted net loss of approximately US$4.6 million, due to COVID-related theatre closures from late January to late July. Total revenue of approximately US$45.6 million and a profitability turnaround to approximately US$10.9 million adjusted earnings for the second-half of 2020 reflects a strong rebound in box office despite the temporary delayed release of major Hollywood tentpole films, as well as increased installation activities.
“We are pleased to see an impressive resurgence in box office upon theatre reopenings as Chinese audiences come back to IMAX – more than ever – underscoring the growing demand for blockbusters and the strength of our brand as the pinnacle of a premium out of home entertainment experience,” said Richard L. Gelfond, Chairman of IMAX China. “Despite the unprecedented challenges in 2020, we hit new records in multiple key theatrical windows, including National Holiday, New Year’s Day and Chinese New Year, highlighted by our meaningful market share gains in local language titles as productions increasingly lend themselves to IMAX. Our continued signings momentum with leading exhibitors, including Wanda and Jinyi, and our backlog of 251 theaters illustrates our partners’ long-term commitment to the IMAX Experience.”
“IMAX China’s premium positioning built upon our brand, technology and network scalability has only been further strengthened post-pandemic as theatrical entertainment increasingly calls upon differentiated offerings in both content and exhibition,” said Mr. Gelfond. “Given the recent recovery in our business, strong cash position and the recurring cash flow generating ability of our network, we are happy to announce we maintained a stable annual dividend per share in 2020 as in prior years and will increase our future dividend payout ratio from 33% to 50% of net income, despite the earnings impact from COVID-19 in 2020.”
“Despite a six-month theatre closure and the temporary delay of major Hollywood tentpoles, IMAX China delivered box office share gains with local language blockbusters, continued network growth and expansion in new theatre signings– a strong testament to IMAX China’s commercial value to consumers, filmmakers and exhibition partners,” said Edwin Tan, Chief Executive Officer of IMAX China. “We feel very well-positioned to continue delivering above-industry growth on our strengthening footprint in local language films and a film slate increasingly empowered with IMAX DNA”
IMAX China Dividend
IMAX China today announced that its Board of Directors recommended the payment of a final dividend of US$0.02 per share or approximately US$7 million in total, based on the total number of shares in issue as of 31/12/2020. The dividend will need to be voted on by the shareholders at the Company’s annual general meeting. IMAX China also announced a dividend payout ratio of 50% of net income from 2021 onwards, up from the 33% it had paid out during the pre-COVID years of 2017 to 2019.
In February 2021, to maximize liquidity, the Company sold all of its 7,949,000 shares of Maoyan for total gross proceeds of US$17.8 million.
Despite COVID-19 related theatre closures through late July, the Company delivered further network expansion with a total of 745 systems in the IMAX® theatre network in Greater China as of December 31, 2020. The Company signed agreements for 38 theater systems in full year 2020, bringing total backlog to 251 theater systems as of December 31, 2020. Signings were headlined by a 20-theatre agreement with Wanda, the largest exhibitor in China, and a 12-theatre deal with Jinyi, the second-largest exhibition partner of IMAX China. Both agreements involve upgrades of top performing theaters to IMAX with Laser® projection systems and the addition of new IMAX locations across the country.
The Company installed 42 new and upgraded theatre systems during the full-year 2020, compared to 95 installations in 2019. The year-over-year decline is due to suspended development activities through a portion of the third quarter as a result of COVID-19. Among the 745 systems in Greater China as of December 31, 2020, 376 operate under full revenue sharing arrangements, 106 under hybrid revenue sharing arrangements and 263 operate under sales arrangements.
Box Office Update
The Company’s refined local language programming strategy, expanding network and growing consumer recognition as the ‘go-to’ destination for blockbusters drove a strong rebound of IMAX China’s gross box office to approximately US$92 million since theatres reopened in mainland China late July through end of 2020. This represents an approximately 3.6% box office market share, up from 2.8% in the prior year period. In 2020, the top five grossing titles accounted for 47% of industry box office in mainland China, all of which were available in the IMAX theatre network.
Greater China Key Metrics
|Twelve months ended December 31,|
|Greater China Signings|
|IMAX with Laser Upgrade||17||1|
|Greater China Theatre Installations|
|IMAX with Laser Upgrade||3||12|
|Greater China Network|
|Greater China Backlog||251||253|
|IMAX Greater China Box Office||US$99 million||US$366 million|
|HK/ Taiwan Only||8||7|