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

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.

US sanctions on Huawei could backfire

SINGAPORE (May 27): It was only to have been expected. After nearly a year of pressure that failed to stop Huawei Technologies Co’s expansion -- especially in the rollout of the next generation 5G wireless network globally -- in its tracks, US President Donald Trump signed an executive order effectively barring American firms from doing business with the Chinese telecommunications equipment company. The inclusion of Huawei on the US Department of Commerce’s Bureau of Industry and Security’s (BIS) Entity List means that companies would need to apply for a waiver to supply goods with 25....

Annica chairman Ong quits just as $33 mil goes missing at his law firm JLC

SINGAPORE (May 27): Jeffrey Ong, managing partner of law firm JLC Advisors, may have given instructions to pay out a sum of $33.2 million held in escrow by his firm for a client, Allied Technologies. According to Allied’s statement filed with Singapore Exchange on May 23, the payment may have been “unauthorised”, citing a letter it received from JLC on May 22. Allied’s statement did not specify who the payment was made to. Ong also abruptly resigned as non-executive chairman of Annica Holdings on May 20. In a May 22 filing with SGX, Annica CEO Sandra Liz Hon Ai Ling said Ong resigne....

SGX RegCo sees targeted approach in enforcement, more powerful market discipline

SINGAPORE (May 27): Tan Boon Gin, CEO of stock exchange regulator Singapore Exchange Regulation, says the market can expect a stronger regulatory presence. “You will see a series of enforcement cases coming up quite soon,” he tells The Edge Singapore. Tan’s assertion comes amid significant changes in the market as sentiment remains lacklustre and investors’ expectations change. The local stock market has gone through significant upheaval, not least because of the penny stock crash in 2013 that wiped out some $8 billion in value from the market. The event dented investor sentiment, a....