Imax China’s first-half profit drops 7.1 per cent as China’s box office growth cools

Imax China Holdings, the Hong Kong-listed provider of Imax systems for cinemas in China, posted a 7.1 per cent fall in net profit for the first half, as it continued to be hurt by sluggish demand from operators amid slow ticket sales.

The company announced on Thursday that first-half net profit was US$16.5 million for the six months to June 30. The result was below analysts’ consensus estimates of US$17 million, according to Bloomberg.

Revenue fell 6.3 per cent to US$51.6 million, compared to US$55 million over the same period in 2016, according to the company’s filing to the Hong Kong stock exchange.

Imax China’s shares fell 1.8 per cent to HK$21.40 at the close of Hong Kong trade on Thursday.

Having had a presence in greater China for more than 15 years, the exclusive licensee of the Imax brand generates revenue by charging fees to exhibitors for the Imax theatre system and associated services, brand and technology licensing and maintenance services, as well as sharing a fixed percentage in its studio partners’ box office generated from films processed by the company.

Ray Zhao, an analyst at Chinese brokerage firm Guotai Junan Securities, said the outlook for Imax China in the second half remained difficult.

“We actually had predicted the earnings results of the company to be positive previously, as we have seen several Hollywood blockbusters screened in cinemas for the first half,” Zhao said.