mm2 Asia FY20 net profit down 81.5% on Covid-19 impact

Singapore

FILM production group mm2 Asia saw its net profit decline 81.5 per cent in its latest financial year due to a challenging environment exacerbated by the Covid-19 pandemic.

For financial year 2020, which ended March 31, 2020, its net profit was S$3.5 million, the mainboard-listed company said late on Saturday.

Chang Long Jong, chief executive of mm2 Asia, said the operating landscape has become increasingly challenging due to the pandemic but expressed optimism in the "underlying growth fundamentals" of the business.

"The group was able to remain profitable and improve the cashflow generation during the year, owing to our diversified businesses across the areas of content creation, live entertainment, cinema operations and digital content and technology, as well as across different geographical markets," Mr Chang said.

He added that the group is confident it will emerge from the pandemic stronger than before.

In a statement, the group said revenue decreased 11.4 per cent year-on-year to S$235.8 million - mainly due to a decline in contributions from its core business, cinema and post-production business segments. It considers the distribution and production of motion picture, video and television programmes to be its core business. This was, however, partially offset by a rise in revenue from its events business, it said.

mm2 Asia said operations of these segments in North Asia and South-east Asia were disrupted by safe-distancing measures and travel restrictions in Q4, while the release of various project titles and tour shows had to be rescheduled. Cinema sales were also affected due to a slowdown in economic activities in Malaysia and Singapore, and the group said it recognised an impairment loss on goodwill of S$10.7 million due to the negative impact on cinema operations.

Meanwhile, it managed to get an in-principle approval to defer a S$15.5 million loan. It said the deferment amount will be reclassified as non-current liabilities in the next reporting period.

Looking ahead, the group's strategy remains focused on North Asia, with more projects in the pipeline, it said. It added that it will continue to strengthen its content creation capabilities to cater to platform providers.