Spackman's 1Q earnings plunge 93% to $0.5 mil on absence of profit contribution from movies

Spackman's 1Q earnings plunge 93% to $0.5 mil on absence of profit contribution from movies

Michelle Zhu
14/05/18, 05:33 pm

SINGAPORE (May 14): Spackman Entertainment Group posted 93% lower 1Q18 earnings of US$0.4 million ($0.5 million) compared to earnings of US$5.4 million a year ago on higher costs and expenses as well as lower other income.

Revenue for the quarter rose 31% to US$10.5 million from US$8 million a year ago, due mainly to higher revenue from the distribution of films and others on the recognition of the sales and distributions rights/video on demand (VOD) sales for The Outlaws by the group’s 51%-owned subsidiary, Novus Mediacorp.

Higher revenue contributions from Frame Pictures, which was acquired in Mar 2017, and maiden contributions from Constellation Agency, acquired in Jan 2018, also helped to boost topline for the quarter.

Cost of sales however grew 79% on-year to US$7.44 million due to a US$3.4 million copyright fee paid for The Outlaws, while cost of sales of content also grew with the acquisition of Constellation.

Other income fell by 95% to US$0.2 million from US$3.2 million a year ago in the absence of a one-off gain booked in 1Q17 on the partial disposal of Spackman’s associated company in its acquisition of Frame pictures.

General and administrative expenses doubled to $2 million from $1 million a year ago with the acquisition of Frame Pictures, which resulted in increased depreciation and amortisation, service fee and rental expenses.    

Richard Lee, interim CEO and executive director of Spackman, opines that the “timing is ripe” for its 51% owned subsidiary, Novus Mediacorp, and wholly-owned subsidiary, Frame Pictures, to seek a separate listing to take advantage of a rapidly-growing post-theatrical market.

See: Spackman appoints director Richard Lee as interim CEO

This will also unlock higher value as a combined stand-alone entity independent of the group, he adds.

Spackman has appointed RHT Capital as its financial advisor for its proposed spin-off.

See: Spackman to list subsidiaries Novus Mediacorp and Frame Pictures on Catalist board

The group says it is also preparing to enter into the Korean drama series production business through its intended strategic partnership with Korean TV drama producer Mongjakso.

Shares in Spackman closed flat at 7.5 cents on Monday.

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