After a tumultuous year, Asian cinema operator and distributor Golden Harvest’s net profits rose slightly in a year marked by ongoing restructuring.Net profits for the group plummeted from HK$96.7 million ($12.4 million) to $1.38 million in the year to June. But restated to show only the continuing operations, the results announced Friday show a move from losses of $2.94 million to profits of $900,000.
Year also saw control of the company pass from founder Raymond Chow, who sold his 24% stake, to Chinese talent and production company Chengtian, backed by its largest shareholder, Japan’s Avex.
Revenues grew 32% to $80 million, which the company attributed to strong box office returns from its multiplex in Shenzhen, just over the Chinese border from Hong Kong. New chairman Wu Kebo said 2007-08 was the “best year on record both in terms of admissions and box office income.” Company sold more than 19 million tickets.
Previous year profits included an exceptional gain from sale of GSC, one of its two Malaysian chains. In July, after the end of the financial year, it sold its remaining Malaysian business, TGV Cinemas, for $15.7 million, leaving the company focused as an operator on Hong Kong and China and with joint ventures in Taiwan (Vie Show) and Singapore (GV).
By territory, the group’s exhibition performance was less than stellar; it grew in line with the market in Hong Kong, returned same again profits in Taiwan, and in Singapore lost market share but grew profits. As distributor, it enjoyed a 21% growth in Chinese language business to $43.5 million and a 26% growth for foreign-language films to $8.84 million.
The company said most of its anticipated future growth will come from China — where it said the market is opening up, though it’s being slowed by government austerity measures. It is building a second phase to its Shenzhen complex and plans to build in Beijing, Hangzhou, Suzhou and Wuxi.
The company’s shares have been suspended from trading since August, as the Chengtian takeover has left the public float below the minimum required by Hong Kong Stock Exchange rules.