EuropaCorp posts $44 million loss

Company announces move into China

In line with analysts’ expectations, Luc Besson’s EuropaCorp posted a net loss for the financial year ended March 31 that widened to €30.2 million ($43.7 million) from $14.2 million for 2009-10.

Already announced, 2010-11 revenue edged down 1.4% to $258.6 million.

CEO Christophe Lambert also told analysts Thursday that EuropaCorp will open an office in China to negotiate directly with local film authorities for the release of their films there.

EuropaCorp issued a profit warning late May after unveiling a 2011-14 strategic plan earlier in the month to reboot the company.

Annual results for the Euro production-distribution powerhouse gave analysts cause for optimism about EuropaCorp’s burgeoning TV production biz and a current production slate powered by four big English-language movies. Zoe Saldana starrer “Colombiana” bows July 27 in France, the Besson-directed “The Lady” with Michelle Yeoh is out Nov. 30 and futuristic actioner “Lock-Out,” with Guy Pierce, on Feb. 22. “Taken 2,” with Liam Neeson, will go into production in November with Fox taking delivery in March. Lambert also confirmed Thursday that Jean-Pierre Ameris will direct “L’Homme qui rit” (The Man Who Laughs), a drama based on Victor Hugo’s classic novel and starring Gerard Depardieu and Emmanuelle Seigner.

Nearly 60% of losses could be ascribed to weak international sales on “Arthur 3: The War of the Two Worlds,” the last part of Besson’s animation/live-action trilogy, Lambert said. Budgeted at $99 million, according to France’s CNC film board, it failed to secure a U.S. theatrical release.Restructuring costs — the integration of TV shingle Cipango into EuropaCorp TV, management changes, depreciation in movies’ value and past investment — came in around $28.9 million in 2010-11, said Thomas Jorion, at Natixis. However, Jorion pointed out that EuropaCorp was able to offset a drop in international revenues (down 56% to $50.5 million, 2010-11) by sales of movies to French TV operators (up 56% to $62.4 million) and $22.7 million sales from EuropaCorp’s entry into TV series production, driven principally by income from “XIII.”

EuropaCorp TV has sold its “Transporter TV,” series to HBO for the U.S. RTL has taken German rights. It is producing Jan Kounen’s miniseries “Flight of the Storks,” co-developed with Canal Plus and sold abroad by TF1 Intl.

In international film sales, EuropaCorp has secured output deals with Universum for Germany and Scanbox for Scandinavia.

The main leverage EuropaCorp has over its business remains, however, its ability to create contained-budget English-language thrillers with a world market including the U.S.

In a lesser year for English-language releases, EuropaCorp’s biggest hit in 2010-11 was Guillaume Canet’s “Little White Lies,” which grossed $45.5 million in France.

“Looking at the underlying results, a back catalog that has real value, the growing importance of TV production and the movie pipeline, I am quite confident EuropaCorp will see a rebound,” Jorion said.

Lambert did not announce big new movie titles, given EuropaCorp’s promise not to greenlight movies until 80% of finance is covered.

Guillaume Laurant (“Amelie,” “A Very Long Engagement”) is co-writing “The Man Who Laugh’s” adaptation with Ameris. “Man” opens in England in the late 17th century and follows the life-journey of a man whose face was disfigured as a child into a perpetual grin. Ameris last helmed “Romantics Anonymous,” which played at Tribeca.

EuropaCorp stock appreciated 3.4% to S5.80 in Thursday morning trading.