China's Wanda Sees Growth in Film Unit in 2018 Despite Challenges
Total revenue at billionaire Wang Jianlin's embattled conglomerate fell for a third consecutive year, but the company's film holdings reported revenue growth of 9 percent.
Chinese billionaire Wang Jianlin's Dalian Wanda Group saw its revenue fall for the third consecutive year in 2018, but the conglomerate's film division was a bright spot.
Total revenues at Wanda were $31.7 billion (214.28 billion yuan), down 5.7 percent from 2017 numbers. Revenue from Wanda's film businesses, however, climbed 9 percent to $8.61 billion (58.1 billion yuan) over the same period.
As in past years, profits for the privately held conglomerate were not revealed. The results were presented by Wang during Wanda's annual year-end business conference in Qingdao, China.
Wanda remains the world's largest cinema operator, with a sizable stake in North American theater circuit AMC Entertainment and full control of China's largest chain. The conglomerate runs 1,641 multiplexes and 16,600 screens worldwide as of the end of 2018. The group opened 114 new multiplexes last year, compared with 199 in 2017. Wanda's film revenue growth closely tracked China's total box office uptick of 9 percent in 2018.
Wanda co-produced and distributed China's second-biggest blockbuster of 2018, Detective Chinatown 2 ($541 million), and had an investment stake in Hello Mr. Billionaire, which ranked fourth for the year ($367 million).
The overall revenue dip at Wanda Group reflects the company's ongoing efforts to trim debt and reverse its foreign buying spree — both undertaken under pressure from the Chinese government. Total assets held by Wanda assets fell 11.5 percent to $92.7 billion (625.73 billion yuan).
After coming under harsh — nearly disastrous — criticism from the Chinese government for a pattern of foreign buying deemed "irrational," Wanda has sold off nearly all of its marquee foreign real estate holdings, including a coveted $1.2 billion mixed-use development in Beverly Hills. It also disposed of a substantial chunk of its stake in AMC — a full-circle reversal given that buying majority control of the U.S. exhibitor for $2.6 billion was the deal that put Wanda on the global map back in 2012. The company also sold its stake in Spanish soccer club Atletico Madrid — a particularly stinging blow for Wang, an avowed soccer fan.
At home, Wanda fully exited from its Qingdao Studio Complex this year. Wanda sold majority ownership of the studio and the bulk of its domestic theme parks to fellow property developer Sunac China for $9.3 billion in mid-2017 — at the peak of its debt woes. Initially, Wanda said it would retain a minority stake in the sprawling Chinese movie studio, as well as management control. Both Wanda and Sunac decided that arrangement was "inefficient" early this year, however, and Sunac bought out Wanda's remaining stake.
Wang, famous in China for his domineering spirit, staked out several areas of targeted growth during the company's Qingdao conference. The tycoon said the company had opened 49 of its signature Wanda Plaza mixed-use commercial real estate projects in the past year. He said the company will be aggressive about pursuing growth through the construction of hospitals and health-care facilities in China.
Last week, Reuters reported that Wanda is preparing an initial public offering in the U.S. for its sports holdings. The company's remaining international sports assets include Swiss sports marketing company Infront Sports & Media AG, and World Triathlon Corp, the organizer of Ironman races. Citing unnamed sources, Reuters said Wanda would seek to raise $300 million to $500 million with the IPO.