Internationalmedia, the corporate parent of Los Angeles-basedIntermedia and IEG, today (Mar 14) announced a Euros 29m operating loss for2002 that swelled to Euros 99m including a write-down of goodwill assets,according to preliminary fourth quarter and year end 2002 figures.
Coming off the back of a year blighted by "painful" corporaterestructuring, Moritz Borman, chairman of Internationalmedia's managementboard, sounded an optimistic note as the company disclosed estimated fourthquarter revenues of more than Euros 100m and a Euros 3m operating profit.
"This was nothing we didn't expect. We made a loss last year butwe knew that already," Borman told Screendaily. "The highlight is that wefinally stopped the bleeding in the fourth quarter and didn't spend more thanwe made, which shows that the restructure, which was extremely painful foreverybody involved, has at least shown the results that we thought it had tohave."
Revenues for the fiscal year ending Dec 31 2002 are expected to bearound Euros 260m, which represents growth of more than 50% against theprevious year and was driven chiefly by the Jan 2002 acquisition of IEG.Internationalmedia's cash position of Euros 56m at the end of 2002 is ahead ofits earlier estimates. Final figures will be announced on Mar 27.
The Euros 29m operating loss for the year (excluding write-down)was due to lower than expected financing fees, international exchange rates,the postponement of film starts and releases from 2002 to 2003, an increasednumber of pictures in active development and corporate restructuring expenses,company executives said.
This corporate restructuring should result in an approximate Euros29m decrease in the company's expenditure for 2003, a figure roughly equal toits 2002 operating loss. The one-off, Euros 70m non-cash write-down of goodwillassets does not affect the company's operations, cash position or liquidity.
Commenting on the write-down, Borman said: "Every company hastaken the opportunity to write down goodwill and it doesn't affect operations.It's good business because it cleans up the company and also gives ourshareholders an up-to-date view of the company as seen by the market."
"We also took the opportunity to make sure that the restructurecharges were all in the fourth quarter, so there are costs that are coming thisyear that will have already been provided for."
He added that the company's financial performance in 2003 wasexpected to improve, given its bigger release slate, expanding film library, large asset of pre-financed development andproduction costs for future releases, significant reduction in overheads and50% ownership of the recently launched sales company IS Film Distribution.
Intermedia and IEG, whose current release slates include GangsOf New York, Adaptation and The Quiet American, have earmarked seven pictures forrelease in 2003. They include: Terminator 3: Rise Of The Machines, starring Arnold Schwarzenegger; Basic, starring John Travolta; Mindhunters, starring Christian Slater; and SuspectZero, which stars AaronEckhart.
Six more titles are set to go into production this year,including: Oliver Stone's Alexander, starring Colin Farrell; Martin Scorsese's The Aviator, starring Leonardo DiCaprio; and LawsOf Attraction, whichstars Pierce Brosnan and Julianne Moore.