IMAX China (1970) H2 2023 earnings summary

Executive summary

• FY2023 recovery lifted revenue 18.7% to $87.0M and profit to $27.5M from $10.8M; adjusted profit reached $29.8M, up 140.3% YoY.

• Mainland China theatre operations resumed normal activity, with film releases rising to 57 from 25 and IMAX box office revenue increasing 83.3% to $298.3M.

• Network ended FY2023 at 807 theatres and 206 systems in backlog; 14 theatres closed during the year, including one relocation.

Financial highlights

• Revenue was $87.0M vs. $73.3M; cost of sales fell 3.6% to $32.4M, lifting gross profit to $54.5M from $39.7M.

• Operating profit rose to $32.2M from $14.4M; profit before tax was $33.7M vs. $15.3M and net income was $27.5M vs. $10.8M.

• Adjusted profit, excluding share-based compensation and its tax impact, was $29.8M vs. $12.4M; FY2022 included a $4.5M film-investment impairment.

• Operating cash flow was $12.5M vs. $1.2M; cash and cash equivalents declined to $62.7M from $75.0M.

Outlook and guidance

• Strategy prioritizes Chinese-language films and Filmed for IMAX releases; the slate delivered a record number of Chinese-language films in FY2023, with the strategy to continue in 2024 and beyond.

• 2024 plans include further local-language films and expanded IMAX laser rollouts; scheduled film releases may change by territory and timing.

• Backlog comprised 206 systems, with a stated carrying value of $131.9M; future revenue depends on installations, which can be delayed or cancelled by exhibitors or construction schedules.

• Capital expenditure plans prioritize network expansion through revenue-sharing arrangements and execution of existing backlog and future signings.