International media will stay in red this year
BERLIN — German film group Internationalmedia posted a first-quarter loss and a 62% drop in revenue to E30.8 million ($36.5 million) on Thursday as a result of continuing writedowns on film development costs and a lack of theatrical releases so far this year.
Company said it would stay in the red this year. Losses amounted to $5.4 million in the first three months of 2004, down from a $1.3 million profit in the same period last year. Group recorded an above line operating loss (before interest, tax and amortization) of $5.9 million.
Internationalmedia topper Moritz Borman put the figures down to “the difficult economic environment.”
Overages from “Terminator 3: Rise of the Machines” accounted for the lion’s share of revenues. Although company suffered a revenue drop of $59 million from the previous year, company stressed that it had four theatrical releases in the first quarter of 2003 while no films were released in the past quarter.
Group added that most of the losses were due to the high depreciation of previous film development costs, which amounted to $5.2 million. The writedowns do not affect liquidity, however, and are expected to be significantly lower after this year.
Actual film development spending for the first quarter amounted to $1.9 million, while overhead costs were down $1.5 million to $4 million. The sale of Initial Entertainment Group in March helped lower liabilities by $94 million to $174 million. In April, company inked an $18 million financing deal with a U.S. investment group to cover pre-production costs for upcoming films.
Internationalmedia’s major release this year will be Oliver Stone’s “Alexander,” starring Colin Farrell, which hits theaters in November. Warner Bros. Pictures will distribute in the U.S and Constantin Film in Germany.