UTV posts first profit since float

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LONDON -- Indian-owned movie production, distribution and financier UTV Motion Pictures, listed here on the Alternative Investment Market, posted a pretax profit of $8.4 million for its maiden interim results.

The company, which floated on AIM in July and aims to set up a business model based on the U.S. studio system, raised $65 million from the flotation and struck several deals during the period ending Sept. 30.

The outfit, which encompasses Bollywood movie distribution and production in addition to international filmmaking ambitions, struck a deal with Virgin Comics "to create four original superheroes in India."

It also boarded M. Night Shyamalan's "The Happening" as co-producer and will provide financial muscle to the production.

From the float to Sept. 30, the company earned revenue of $10 million and posted an operational profit figure of just north of $5 million.

The company also told the market it is expanding into the Telgu film market, India's second-largest, and plans to produce movies there.

Its first project is "Kennamoochi Yennada," and marks UTV's first South Indian production in the Tamil language. The title is set to be released in November.

During the period since the float, the company subscribed to shares of its operating subsidiary at par when the net asset value of the subsidiary was $2.9 million.

In the consolidated financial statement, the excess of net asset value over the investment value of $2.9 million has been recognized as "Negative Goodwill on Consolidation," which is a one-time income.

"UTVM is entering an exciting phase with an extensive slate of projects, under development and soon to be released, with eminent directors and excellent talent," UTV nonexecutive chairman Ronnie Screwvala said. "Such a diverse slate, containing multiple genres, languages and budgets reaffirms our Hollywood studio business model, which we believe will generate excellent future returns for UTVM shareholders."
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