Digital Domain Holdings, the Hong Kong-listed listed company that includes visual effects company Digital Domain, Friday warned of growing losses in the six months to June.
The losses are blamed on the firm’s recent corporate moves into virtual reality and other related sectors.
“The loss for the interim period is expected to increase significantly as compared with the prior period (January-June 2015),” it said in a regulatory filing to the Hong Kong Stock Exchange.
In the six months to June 2015 it lost US$10.8 million (HK$84 million.) In the full year to December 2015 it lost US$23.2 million (HK$180 million.)
“In connection with the Group’s continued expansion of its media entertainment business, through the acquisitions of Immersive Ventures Inc. (“IMV”) (completed on 30 December 2015), Lucrative Skill Holdings Limited (completed on 14 April 2016) and remaining 30% of Digital Domain-Reliance, LLC (completed on 30 June 2016) and through establishing collaborations in the Greater China region, the group has recorded a substantial increase in administrative and other operating/projects expenses, share-based payment expenses and finance costs in the six months ended 30 June 2016 (the “interim period”), while it has recorded a modest growth in revenue for the period (when compared with the six months ended 30 June 2015 (the “prior period”) maintaining a stable gross profit margin when compared with that reported for the year ended 31 December 2015,” it said in the statement.