Imax China, the Hong Kong-listed subsidiary of Imax, has warned that it expects a net loss between $34 and $36 million for the first half of the year, as cinema closures in the country due to COVID-19 have slammed exhibition firms.
The 2020 figures stand in contrast to a net profit of $24 million in the same period last year.
There are around 700 Imax cinemas in mainland China, nearly all of which have been shut since late January because of the coronavirus.
A notice posted Tuesday to the Hong Kong stock exchange said the 2020 decrease was primarily attributable to the shutdown and coronavirus slowing the installation of new theater systems. A non-recurring deferred income tax charge and provisions of around $9 million made for trade and financing receivables were also other factors.
The news comes after China’s largest cinema chain operator Wanda Film said last week that it anticipates net losses of between $214 and $228 million in the first half of the year, down from net profits of $75 million (RMB524 million) during the same period last year. Its 600 complexes have also been shut for nearly that entire time, and its blockbuster “Detective Chinatown 3” indefinitely postponed its late January premiere.
Despite the downturn, Wanda and Imax struck a 20-theater agreement earlier this month, in which Wanda will upgrade ten of its existing theaters to the latest “Imax with Laser” technology and install Imax systems at ten others. With these upcoming systems, there will be 378 Imax screens across China at Wanda venues.
Wanda Film’s executive president said that Imax “will be critical in welcoming back to theaters and offering the best possible cinematic experience well into the future.”
Last year, Imax saw a record-breaking year in China with a box office of $366 million. It may be quite some time before the company sees such highs again.
Although cinemas began reopening from Monday, the Chinese box office has so far been slow, with theaters earning just $500,000 nationwide their first day back in business. The strong $20.8 million opening weekend of South Korean zombie film “Peninsula” elsewhere in Asia, however, provides some hope of a faster recovery once desirable new blockbusters start hitting screens with regularity again.