IMAX Corporation (NASDAQ:IMAX; TSX:IMX) and SM Prime Holdings, the largest mall operator and exhibitor in the Philippines, today announced an agreement to install five digital IMAX projection systems at SM shopping malls in the cities of Las Piñas City, Fort Bonifacio, Davao City, Angeles City and Manila.
The deal follows the market-leading success of SM's two existing IMAX® theatres in Manila and Quezon, with the operator's first IMAX location in Manila ranking as the highest grossing screen in the country since it opened.
Under the terms of the parties' agreement, three of the IMAX theatre systems are expected to be installed in 2011 and two in 2012. SM will also open another location under a previous agreement in the city of Cebu this month in time for the highly anticipated release of Inception. The new theatre deal brings the total number of IMAX system deals announced year-to-date to 89, which compares to 35 system signings in all of 2009.
"The tremendous success of our first two IMAX theatres demonstrates how consumers in the Philippines love The IMAX Experience®, and based on this success, the next logical step for our business is to add more locations," said Mr. Hans Sy, President, SM Prime Holdings Inc. "The IMAX theatres serve as a great source of incremental revenue for our business, and we're seeing a growing demand for the IMAX brand as more big Hollywood movies are released in the format."
"SM Prime Holdings has been a fantastic partner for us in the Philippines, and they have done a great job of marketing The IMAX Experience to their patrons, which has contributed significantly to the strength of the brand in that market," said IMAX's Chief Executive Officer Richard L. Gelfond. "SM's commitment to add five additional locations demonstrates how the success of our theatre business model is driving repeat business from our existing exhibition partners. We also believe that an endorsement from a prominent and successful IMAX operator will further stimulate exhibitor interest in the IMAX business in the Asia-Pacific region."
Mr. Gelfond continued, "This deal also builds on the momentum of theatre systems signings activity and network growth that we have experienced since the beginning of the year. So far this year we have more than doubled the total number of systems signings as compared to 2009 with many of these new locations scheduled to open in 2010 and 2011. This network expansion will have a positive impact on IMAX's future revenues and earnings given the revenues from the sales of the systems and recurring revenues from joint revenue sharing theatres, theatre maintenance and box office royalties."
The two existing IMAX theatres operated by SM in the Philippines have consistently posted market-leading box office performances. For the recent release of Toy Story 3, the two IMAX screens generated a per screen average that was more than seven times the national per screen average for the film. For Alice in Wonderland, the IMAX per screen average was more than ten times the national average.