Operating net profit of HK$32.8M excluding the one-off non-cash outflow write-off
Payment of an interim dividend of HK0.5 cent
HONG KONG, June 16 /PRNewswire-Asia/ -- Qin Jia Yuan Media Services Company Limited (stock code: 2366, hereinafter referred to as "Qin Jia Yuan" or the "Group") announced the interim results for the six months ended 31 March 2009. The Group recorded a turnover of HK$115.8 million. Turnover from channel advertising business reached HK$47.1 million, representing an increase of 79% from the corresponding period last year. Turnover from production related business recorded a decrease of 36% as compared to the same period last year. The Group made an one-off write-off and impairment loss of HK$465.9 million which did not involve any cash outflow and a decrease in RMB exchange leading to an exchange loss during the period. Accordingly, a consolidated loss after tax of HK$433.1 million was recorded.
Excluding the one-off write-off and impairment loss, the operating business of the Group recorded a profit after tax amounting to HK$32.8 million. On the basis of earnings per share of HK4.8 cents, the Group declared an interim dividend equivalent to HK0.5 cent per share with an option for the shareholders to elect to receive the dividend in cash or in scrip shares.
Dr. Anita Leung Fung Yee ("Dr. Leung"), Chief Executive Officer of the Group, said, "Since the global financial tsunami occurred in the fourth quarter of 2008, the countermeasures identified by the management of the Group mainly include: to ensure the collection of receivables on schedule, to reduce investment projects with a long production cycle, to strengthen the business with a shorter collection period, to capitalise on the opportunities of cash shortage in the market and to continue to expand the cross-media advertising agency platform with TV as the backbone in a prudent and proactive manner."
Dr. Leung further said, "The production of large-scale TV drama series, one of the three major business areas of the Group, shall be recognized as a long-term business investment project due to the long recovery period which may be up to 2 to 3 years. The increased risk was evidenced by the delay in repayment from the distribution of large-scale TV dramas in the first quarter of 2009, leading to a wave of divestments and project suspensions of these large-scale TV dramas, as covered by various media reports. As a result, given the uncertain global economic outlook, the Group has decided to suspend the long-term investment projects, including various large-scale TV dramas production and cancelled the original plan for the Dongguan TV Dramas Production Centre which resulted in an one-off write-off of the amounts already spent on these long-term investments without further cash outflow."
Dr. Leung further mentioned the three major areas of the Group's future development:
(1) The great market demand for the QJY's film library with thousands of episodes facilitates the Group's expansion of its TV advertising agency platform and increases the distribution income. Therefore, the group will acquire copyrights and long-term broadcasting rights of quality TV dramas on a continued basis. The Group will also produce TV dramas such as serialized, column and situational dramas and non-script TV programs, including but not limited to interview talk shows, variety show, documentary, entertainment and information, which are relatively low budget and have a shorter recoupment cycle so as to enhance the genres and quality of the Group's film library.
(2) The turnover contributed by the exclusive TV channel advertising agency rights held by the Group for the period amounted to HK$47.1 million, an increase of 79% compared to the same period last year. Therefore, the Group will further acquire quality advertising agency rights of TV and other popular and unique media in the second half year so as to further strengthen Qin Jia Yuan's cross-media advertising agency platform with TV as its core business.
(3) Given the circumstances that the PRC market has been subject to minimal damage from the financial tsunami and the state policies focus on stimulating domestic demand, consumer products not only need advertisement to boost their sales but also require marketing and planning services. The Group will develop more comprehensive and diversified public relations and marketing services by making full use of its established advertising network.
Mr. Liu Yuk Chi, David, Chairman of the Strategic Committee for the Group, emphasized that QJY will continue to recruit top management talent from cross-media industries especially in TV to build a strong team with endurance to resist the adversities. With the funding in place and a strong team, the Group is readily moving forward with a view to take the business to the next level.
Amidst uncertain global economic prospects, various experts in global politics and economics recognise that the sectors with the greatest potential for future development are media and energy. The PRC has been generally recognised as one of the few countries to have the most outstanding growth momentum in the short run. Dr. Leung is confident that based in the PRC with media as its mainstream business, the Group can grasp opportunities out of the present crisis to make a breakthrough in its development in the short term.
For media enquiries, please contact:
Canny Liu
Senior Account Executive
Tel: +852-3101-4684
Katherine Chan
Account Executive
Tel: +852-3101-4683
