Production and finance group Internationalmedia announced pre-tax losses of Euros35.7m for the first nine months and as part of a cost cutting programme halved its management board from four members to two.

Graham King will step down from the board although will continue to serve as managing director of Initial Entertainment Group and deputy chairman Caspar von Blomberg will leave the company. Moritz Bormann will continue to serve as chairman and CEO, while chief financial officer Andreas Konle will assume additional responsibilities.

The company blamed the losses on "continued and unexpected economic difficulties in the global pre-sales and production environment," as well as the flop of K-19 The Widowmaker, which grossed about a third of the $90m it was expected to take at the US box office. The film, on which the Intermedia division took a distribution position, was also responsible for boosting turnover by 77% to Euros157m.

Some analysts suggested that IM could effect a turnaround in 2003 since there will be revenues from film releases postponed from this financial year as well as revenues generated from new projects going into production next year. But only one film - the Ben Kingsley-vehicle Suspect Zero - began production in the third quarter.

DZ Bank said that the results were "worse than expected" and maintained its rating of the company's shares at "Reduce".