German media company H5B5 Media has issued a sales and profit warning for the current and coming financial years due to "the reserved purchasing behaviour of German and international television stations".
The Munich-based company now expects sales for the current year to be on the same level as 2000 (DM 39.06m) and operative results to be negative as a result of decreased sales and one-time restructuring costs.
H5B5 had planned to post half of its sales revenues in the US market, but has seen these plans go awry after "unexpected difficulties" in its co-production of The Biggest Step with Fox Television Studios.
"In order to achieve its main goal of ensuring liquidity, H5B5's executive management has decided to suspend the co-production project and is considering severing ties to Fox", an official communique noted. The DM 5m allocated by H5B5 Media as part of its contribution to the co-production with Fox has been retrieved, and discussions are underway of exploring other ways of structuring the production.
In addition, the "altered economic conditions" have prompted the company, which was behind the new IMAX film Ocean Man and served as German coproduction partner on Section 8's Welcome To Collinwood, to launch "a comprehensive package of measures aimed at markedly reducing personnel, streamlining company structure and immediately reducing administrative and operative costs"