Munich-based producer-distributor Constantin Film yesterday said it had prematurely terminated a two-year output deal with US producer Escape Artists as a result of changes to its product sourcing strategy.

Reporting a narrowing first-half net loss of Euros6m (2001: Euros6.7m), Constantin said it had been forced to write-off Euros3.9m - the value of its 10.1% stake in Escape Artists - as it took an option to end the contract early. It was due to have run until 2005.

Constantin said the Escape write-off and the cancellation of licensing agreements with the now insolvent Kirch Group were responsible for the 'depressed financial results.'

The German outfit however reported first-half revenues up 41% to Euros63.4m and said it had made 'a very good start' to the third quarter. It still expects to make annual earnings margins, before interest, tax and other charges, between 2%-5%.