mm2 Asia H2 loss jumps over 10 times to over S$100 million as it writes off cinema business
The biggest blow to its bottom line comes from its share of losses of associated companies
[SINGAPORE] Cathay Cineplexes owner mm2 Asia widened its net loss in the second half of its fiscal year ended Mar 31 by more than 10 times to S$101.3 million, from S$8.7 million in the previous corresponding period.
This comes despite a 21 per cent increase in revenue for the six months to S$79.7 million, from S$65.9 million in the year-ago period.
The declining financial performance was primarily driven by a lower number of completed projects in the concert and event and cinema business versus the previous financial year, said the media company in its financial statement released on Thursday (Aug 28).
The biggest blow to mm2 Asia’s bottom line came from its share of losses of associated companies, which stood at S$75 million for the half-year, up by more than nine times from S$7.2 million the previous year.
For the full year, its share of losses of associated companies stood at S$82.8 million, up from S$11.9 million the year before.
The group said that this was mainly due to the write-off of its cinema business mm Connect.
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Cost of sales for the six months also increased 60.9 per cent to S$86 million from S$53.5 million the year before.
The increase was attributed to the concert and event business, which incurred higher show fees. This was coupled with a rise in operational costs, particularly in professional fees and labour expenses, partially driven by global inflationary trends, said mm2 Asia.
Basic loss per share from continuing operations for the half-year came in at S$0.0186, compared with S$0.0028 in the previous corresponding period.
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No dividend was declared.
For the full year, mm2 Asia posted a net loss of S$105.2 million, widening the S$5.7 million loss it incurred in the year-ago period.
Revenue came in at S$165.1 million for the full year, down 13.9 per cent from S$191.8 million in the prior year.
Basic loss per share for the full year from continuing operations stood at S$0.0193, compared with S$0.0017 the year before.
On its outlook, mm2 Asia said: “The cinema segment faces pronounced challenges: attendance has not fully rebounded following pandemic-driven disruptions, with competition from streaming platforms and tight operating margins placing pressure on profitability.”
It added: “This is compounded by rising operational costs and evolving audience behaviours, making sustained recovery in the cinema business an uphill battle and prompting consideration of restructuring, mergers or divestiture.”
Concert and live event operations also reflect cautious optimism, said the company. “While live entertainment has returned to pre-pandemic levels in many markets, revenue in this segment fluctuates with event cycles, scheduling and consumer sentiment, suggesting that growth will remain uneven in the near term.”
That said, the group maintained that movie production remains buoyed by resilient demand for Asian content and a rebound in local titles, all of which position it to maintain growth despite volatility in international releases.
“The group continues to observe optimistic momentum in movie production, underpinned by regional demand and a strong pipeline of new projects, even as global box office trends gradually recover.”
The company said that its strategic direction for the fiscal year is built upon its three core pillars of embracing new tools such as generative artificial intelligence; expanding into high-potential adjacent areas, including interactive media; as well as spinning off non-core divisions to free up capital.
Shares of mm2 Asia closed Thursday at S$0.005, up S$0.001 or 25 per cent, before the announcement.
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