Youku Tudou Reports 'Narrowing Loss' for 2012 Q4
China’s leading internet television company unveils a year-over-year drop of 43 percent in its net loss, while its CEO said the outlook for the current quarter will be “relatively weak”.
HONG KONG – Top-ranked management of Youku Tudou say they are “optimistic” about the company’s performance in the second half of 2013, after posting a net loss of $18.2 million (113.6 million yuan) for the fourth quarter of 2012 and predicting a “relatively weak” outlook for the first quarter of 2013.
Announcing earnings on Thursday night for the first full quarter for the company after the August 2012 merger of former business rivals Youku and Tudou, CEO Victor Koo said its net loss has “narrowed materially despite sales disruption brought on by the reorganization of our sales team after the merger.”
The results revealed the company’s fourth quarter 2012 net loss ($18.2 million) was 43 percent lower than the individual companies posted during the fourth quarter of 2011 ($39.9 million, a combined, pre-merger number for the two companies).
Koo also said he is pleased with the “solid revenue growth” shown in the quarter, with the post-merger company taking in $102.1 million during the period, a 30 percent increase from the combined net revenues for pre-merger Youku and Tudou in the fourth quarter of 2011.
However, Koo admitted Youku Tudou’s performance in the current quarter might still be relatively weak, with the company’s expectations of consolidated net revenues between $77 million to $83 million, with advertising net revenues expected to bringing in between $67.5 million to $27 million.
Asked in an earnings teleconference about how the merger restructure would impact on the company’s performance, Koo said short-term revenue might be “adversely affected” but he stated he expects “healthy growth,” as overall sentiment has improved in 2013.
Dele Liu, Youku Tudou’s president, said he is confident in the company’s performance this year given “the ongoing growth in traffic,” pointing specifically to the significant growth in mobile devices. In the earnings call after the announcement of the quarter four results, Liu said the company had inked a two-year exclusive licensing rights deal with TVB for the Hong Kong television channel’s new productions and library material, as well as agreements with Korean station SBS and the entertainment company owned by mainland Chinese comedian Zhao Benshan.