China's Bona Film Reports $1.3 Million Net Loss in 2012
HONG KONG – The Beijing-based and Nasdaq-listed Bona Film has reported a net loss of US$1.3 million for 2012, a dip from the company’s net profits of US$14.4 million for the previous calendar year.
Yu Dong, Bona’s founder and CEO, says the company’s annual results were hampered by “a weak fourth quarter” marked by the delayed release of The Grandmaster – which was originally slated for a late-December opening in China before being moved to a January rollout – as well as the lower-than-expected box office receipts for The Last Tycoon (US$23.9 million) and increased startup costs associated with the opening of five new theaters during the period.
According to figures released after the closing of U.S. markets April 1, Bona’s 2012 fourth-quarter net loss stands at US$5.4 million, compared to a net profit of US$5.6 million during the same period in 2011.
Despite the setback, Yu says the company “accomplished a great deal in 2012,” with a strategic investment from News Corp., which saw the international media conglomerate securing a 19.9 percent stake in Bona in May. Bona also signed a letter of intent for film co-production with News Corp.’s Fox International Productions, as well as a co-production term sheet with Universal Studios and Working Title Films, Yu adds.
Bona’s figures reported the company of having distributed 13 domestic films in 2012, with their total takings giving Bona 7.5 percent of the total box office for Chinese productions in the country. This would rank the company as generating the third-biggest share of the market in the year, behind Huayi Brothers and Enlight Media. The top -five Bona Films for the year are 3D martial arts thriller Flying Swords of Dragon Gate, the early 20th century drama The Great Magician, Ann Hui’s award-winning A Simple Life, the gangster flick The Last Tycoon and the period farce The Lion Roars 2.
Meanwhile, Bona has added nine more theaters in China and now boasts of a chain of 20 sites in the country. Theater operations and television production will become two core investment strategies for the company, Yu says.
“Film exhibition and TV provide more stable, predictable revenue streams than our film investment, production and distribution businesses,” he says. “While investment, production and distribution will remain critical parts of our growth, we are committed to achieving greater balance between business segments, and we made important progress in this regard throughout the year. We nearly doubled the size of our high-margin theater network in 2012 with 20 theaters in operation at year-end, putting us on track to meet our goal of 40 owned and operated theaters by the end of 2014.”
Yu says Bona’s first television series, The King's Battles, premiered in December to strong ratings and warm reviews on several of China's largest satellite networks – a development that would galvanize the company’s branching into TV projects, including series based on some of Bona's most popular films.
The company results announcement states expectations of non-GAAP net income for the first quarter of 2013 to be in the range of US$1.2 million to US$1.5 million, with Bona getting off to “a strong start” led by releases of The Grandmaster (US$46.3 million on mainland China) and Bring Happiness Home (US$24.2 million).
“We have a strong film slate for the remainder of the year, with several potential hits including Overheard 3, My Lucky Star and The White Haired Witch, and expect to realize further benefits from our theater expansion,” Yu says.