mm2 Asia posts 59% drop in 3Q earnings to $2 mil on higher expenses

mm2 Asia posts 59% drop in 3Q earnings to $2 mil on higher expenses

By: 
Stanislaus Jude Chan
12/02/19, 11:02 pm

SINGAPORE (Feb 12): Film production company mm2 Asia has reported earnings of $2.0 million for the 3Q19 ended December, 59% lower than earnings of $4.8 million a year ago.

The decline was mainly due to higher administrative and finance expenses during the quarter.

3Q19 revenue jumped 41.3% to $74.1 million, led by contributions from its cinema business which was acquired in 3Q18.

The increase in revenue was also contributed by its core business and event production and concert promotion business.

Gross profit rose 27.8% to $29.8 million, as gross profit margin fell 4.3 percentage points to 40.2% during the quarter.

Administrative expenses rose 31.9% to $18.8 million in 3Q19, mainly due to higher employees' costs, depreciation charges, utilities and rental expenses from its expanded cinema business.

Finance expenses more than trebled to $4.3 million, due to additional borrowings and the issuance of medium term notes in 4Q18, along with the issuance of convertible bonds and notes by its subsidiary.

As a result, net profit fell 31.2% to $4.7 million in 3Q19, from $6.8 million a year ago.

Earnings per share was 58.5% lower at 0.17 cent for 3Q19, compared to 0.41 cent a year ago.

As at end December, cash and cash equivalents stood at $35.7 million.

“We are seeing greater interest by filmmakers to collaborate with us in markets like Hong Kong and Taiwan, as well as an increasing number of productions commissioned by international content distributors. As a result, we are confident in maintaining a healthy pipeline of high-quality regional projects for the next 12 to 18 months,” says Chang Long Jong, mm2’s chief executive officer.

Moving forward, mm2 executive chairman Melvin Ang says the group will continue to implement the strategy of integrating and synergising its content and out-of-home entertainment platforms.

“Most notably, in 2019 and beyond, we expect to see positive growth in our event production and promotion businesses with a strong pipeline of concerts and family entertainment shows across the region,” Ang says.

Shares in mm2 Asia closed half a cent higher, or up 1.5%, at 33 cents on Tuesday before its results announcement.

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