IMAX China has issued a profit warning to the Hong Kong stock exchange with the company having taken a beating from the COVID-19 shutdown this year.
The large-format exhibitor said it was forecasting a net loss of $34M-36M for the six months to Jun 30, 2020, in contrast with a net profit of $24M for the same period in 2019.
The contributing factors will be no surprise to anyone – the operator was forced to shutdown all of its 700 IMAX theaters in China from January 24, as well as a decrease in new theatre system installations during the period.
The company also noted it had a $18M non-recurring, non-cash deferred income tax charge for withholding tax, a decision made to allow “more flexibility in allocation of capital” and to enable it to pay dividends.
On the bright side for IMAX China, the country’s cinemas began cautiously getting back to business in the past week, and the company also struck an expanded partnership with Chinese firm Wanda to build 10 new IMAX theaters and upgrade 10 existing screens.
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