Company blames licensing, theatrical divisions
MUNICH — German indie giant Kinowelt Medien reported higher than expected half-year losses of DM378.5 million ($176 million) late Friday after the stock markets closed, sparking speculation about its future.
Revenues for the first half hit $108 million, 6.2% under last year’s results and below projected figures of DM700 million ($326 million).
It blamed the poor results on its licensing and theatrical divisions, which came in under expectation, along with the writing off of its bankrupt sports merchandising division, Braemier, as well as delays to a licensing deal. Only its in-flight entertainment and home entertainment divisions booked positive results.
Local reports suggest that Kinowelt only has a matter of days left to present banks with a solution to its problems in order to secure its future liquidity. Company has an estimated $279 million in debt to pay back by the end of the year. Analysts said the results were less important than the company’s level of debt.
Company is trying to find partners in all areas of the business while selling off select subsidiaries. Reports suggest it has held talks with Studio Canal, Time Warner and Alliance Atlantis to take an equity stake in the company but no deal has been made. Kinowelt has been forced to look at restructuring following the collapse of Germany’s Neuer Markt stock exchange and the branch-wide difficulty of selling on to local webs.
Broadcasters have been slow to buy from its catalogues. Kinowelt is sinking under the pressure of a $300 million free TV package from Warner Brothers and its inability to sell its wares to TV. So far it has only closed a few smaller deals with German pubcasters and niche channels.