Digital Domain Holdings, the Hong Kong-based visual effects and virtual reality group, saw losses in 2016 more than double to $64.3 million.
Revenues across the group increased 45% from $68 million (HK$527 million) in 2015 to $98.5 million (HK$763 million) last year. Net losses, which totaled $23.1 million (HK$179 million) in 2015, reached $64.3 million (HK$498 million) in 2016.
The company pointed to content development and research and development costs for virtual reality content and games, 360° and virtual humans, and a more than fourfold increase in amortization of intangible assets, as causes of the financial pain.
Having bought up the outstanding 30% of a joint venture business in India in mid-year, DDH now says that it is expanding VFX and VR production capacity in India and in China. “[These] will increase the working capacity of the group and reduce production costs in the long run,” it said in a regulatory filing. “The effectiveness and efficiency of these expansions will be visible in the coming years.”
The company’s shares were unchanged in Friday morning trade on the Hong Kong Stock Exchange. With the shares at a 52-week low of HK$0.41, the company has a market capitalization of US$1.19 billion (HK$9.19 billion).