Why China is an ace in the hole for Canada’s Imax Corp.
The Toronto-based company is betting that a growing international network of theatres, especially in China, coupled with a slate of Hollywood tentpoles on its super-sized screens, will assure a profitable future for the Canadian company.
For Canada’s Imax Corp., China is increasingly the big driver of its fortunes.
Having well over a decade ago diversified away from a maturing North American market by laying down roots in China, Toronto-based Imax is now looking to screen an increasing number of digitally remastered Hollywood blockbusters in that fast-growing Asian market to assure its future growth.
“We are still in the early stages of our international expansion, and our pipeline of new theatre deals remains robust,” Imax CEO Richard Gelfond said Friday as he unveiled a return to profit in the first quarter of fiscal 2012.
Imax currently has around 60 screens in China, with a host of others slated to open in the next three years as that market becomes the Canadian company’s second-largest internationally, after the U.S. market.
That said, Imax faces competition in China from Dmax, locally-originating large format theatre technology that is already being tested on two screens in Beijing and the eastern province of Anhui.
Gelfond dismissed the upstart Chinese 2D and 3D theatre technology as a threat to his established Canadian technology.
“Some of our people have seen it (Dmax) and think there’s a significant differentiation with Imax,” Gelfond told analysts during a morning call Friday.
He added the exhibitor’s growing international theater network, coupled with a growing pipeline of digitally super-sized Hollywood blockbusters, will ensure future success for the 40 year-old Canadian company.
Imax on Friday posted $2.6 million in earnings for the three months to March 31, against a loss of $1 million in the same period of 2011, on total revenue up 23% to $55.6 million.
“Our first-quarter financial results were driven by strong year-over-year increases in recurring revenues, which reflects the powerful combination of film performance and our growing worldwide theatre network,” Gelfond said on release of his company results.