Intermedia has issued its second profit warning this year following disappointing US box office results for K-19: The Widowmaker, the Harrison Ford picture on which the company raised its direct distribution risk.
In January the company announced that it would miss its 2001 forecast, a profit warning that clouded its tie-up with Spyglass Entertainment (Screendaily.com, Jan 14).
IM Internationalmedia, Intermedia's Neuer Markt-listed parent, originally forecasted revenues of Euros330-370m, but has now slashed predictions to $266-286m (Euros270-290m). Shares had fallen 17% by 1.00 pm in Germany, to Euros1.17.
Intermedia also cited a difficult ongoing global economic environment and fluctuations in international exchange rates.
The company said it would not reach its original earnings before interest and tax (EBIT) forecast of $14.8m-$18.7m (Euros15-19m), adding that an exact forecast was not possible in the current economic climate. Financing fees are currently around $19.7m (Euros20m) below initial expectations, with profit from film licensing running about $5.91m (Euros6m) behind forecast.
"Uncertainty in several important sales territories makes the closing of new film contracts difficult to project," the company said in an ad-hoc statement.
K-19: The Widowmaker's US performance is expected to reduce the company's income projections by around $9.85m (Euros10m). The big-budget submarine drama thriller, which screens at Venice, has taken only $34.2 million after six weeks.
Intermedia said its remaining five film starts in 2002 should proceed according to plan, as these films are pre-financed through minimum guarantees. Overhead costs are in line with original expectations, but film development costs are expected to increase by $7.88m-$9.85m (Euros8-10m) against forecast.
Intermedia said its current cash position of $62.5 (Euros63.4m) was "strong" and would ensure liquidity through the year 2003.