Bona Reports 78 Percent Year-on-Year Drop in Net Income for Q1

Yu Dong - P 2012
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Yu Dong - P 2012

The Nasdaq-listed Chinese film production and distribution company announces a net income of $500,000 from January to March.

HONG KONG – Bona Film Group has reported a 78 percent year-on-year drop in net income for the first quarter of 2013, with the company taking $500,000 compared to $2.3 million in the same period in 2012.

In a statement released on Thursday, the company also reported a fall in net revenues (from $43.7 million to $43.3 million), gross profit ($20.8 million to $14.8 million) and gross margin (47.6 percent to 34.1 percent) for the first three months of 2013 compared to the same period in 2012.

The dip continued the trend announced in April, when CEO Yu Dong described Bona as having undergone a “weak fourth quarter” because of the delayed release of Wong Kar-wai’s The Grandmaster, the lower-than-expected box office performance of The Last Tycoon, and increased startup costs for the opening of five theaters in mainland China during the period.

Despite the results, Yu said in a statement on Thursday that he is “pleased” about the company’s performance in the first quarter, with “each of our three first quarter films generating box office receipts that were inline with or above our expectations,” referring to The Grandmaster, Bring Happiness Home  and Princess and the Seven Kung Fu Masters. According, the three films took in $46.8 million (287.2 million yuan), $25 million (153.5 million yuan) and $11 million (67.5 million yuan), respectively.

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“I am particularly excited about the performance of our theater segment, which achieved 77 percent revenue growth and an 81 percent increase in segment profit over the first quarter of last year,” Yu said. “This strong growth was largely attributable to the expansion of our theater network from 12 at the end of first quarter of 2012 to 20 on March 31, 2013. With six to eight new theaters planned to open during the remainder of the year and a slate of diverse, high-quality films that we believe have strong commercial appeal among a range of audience demographics, I am confident that Bona can deliver record financial performance in 2013."

Bona’s statement outlined a prediction of non-GAAP net income for the second quarter of 2013 to be in the range of $1 million to $1.5 million.

Yu said Bona plans to continue construction on two new theaters in the second quarter of 2013, and also “advancing” the company’s collaborations with Fox International Productions, Universal Pictures and Working Title Films.

“In addition to these efforts, we are expanding the range of our content offerings including TV, where we have a pipeline of three series that we expect will begin production later this year, totaling approximately 120 planned episodes," Yu said. "Our outlook for the rest of the year remains strong,” he said, adding that Bona’s financial performance is expected to “progressively improve over the next several quarters.”