16 Feb 2015 07:00
16 February 2015
DQ Entertainment plc
("DQE" or the "Group")
Indian subsidiary financial results for the third quarter and nine months ended 31 December 2014
DQE Entertainment (International) Limited ("DQE India" or "the Company"), the Bombay Stock Exchange and National Stock Exchange of India listed, production and distribution company, which is 75 per cent owned by DQE, has announced its unaudited financial results for the quarter ended 31 December 2014, prepared under Indian GAAP.
Financial highlights for the third quarter ended 31 December 2014:
Revenue: INR 457.10 m (Dec 2013: INR 508.51 m)
o From Production: INR 226.10 m (Dec 2013: INR 378.84 m)
o From Distribution: INR 231.00 m (Dec 2013: INR 129.67 m)
EBITDA: INR 246.89 m (Dec 2013: INR 224.00 m)
Profit before tax : INR 101.58 m (Dec 2013: INR 56.42 m)
Adjusted Profit before tax*: INR 63.97 m (Dec 2013: INR 57.37 m)
Adjusted Profit after Tax*: INR 42.38 m (Dec 2013: INR (12.39) m)
*Adjusted profit before and after tax is after the elimination of a foreign exchange gain of INR 37.61 m for the quarter ended 31 December 2014 and a foreign exchange loss of INR 0.95 m for the quarter ended 31 December 2013.
DQ Entertainment (Mauritius) Limited ("DQE Mauritius"), which has a 75% holding in DQE India, executed a fundraising by way of an issue of senior secured convertible bonds (the "Bonds") on 9 December 2014. DQE Mauritius has received the first tranche of funding from the issue of the Bonds, which represents USD 31.4 m, net of fundraising related expenses. Of this sum, approximately USD 8.2 m has been used to repay bank loans, together with interest and other financial charges.
The Company is making progress with the recovery of receivables. As at 31 December 2014, the amount of outstanding receivables due for payment for more than 360 days stood at INR 2067.6 m. As at the first week of February 2015, DQE India had recovered INR 326.63 m of this sum and another INR 300 m is expected to be recovered by 31 March 2015. The Company has received commitments from certain of its clients which lead the Board of DQE India to believe that it may be possible to significantly reduce old receivables by September 2015.
As a result of the working capital difficulties that the Company faced during the quarter ended 31 December 2014, some productions have been delayed and new productions that were scheduled to commence have yet to go onto the floor. Accordingly there has been a fall in production revenue.
The productions of Lassie and Robin Hood have been completed and this has given a boost to our distribution revenue, which has close to doubled from INR 129.67 m in the previous corresponding quarter to INR 231.0 m in the current quarter.
As indicated in DQE's announcement of 14 November 2014, the market for the Group's services generally remains buoyant. However, delays in the commencement of productions lead the Board of DQE to expect that Group revenues and profits before tax for the year to 31 March 2015 will be materially lower than the same market expectations that were in place at the time of the Group's November 2014 announcement.
Operating highlights
The Company's digital monetisation efforts are gathering momentum, with Power Kids and Tiny Toonz expanding their subscriber bases on a continual basis. Our plans to launch content and games on other popular digital platforms such as the Google play store, Amazon and iTunes are also underway. Power Kids showcases animated content for children aged five and above, whereas Tiny Toonz is aimed at younger children. Both channels have now started gaining traction and have recently achieved a total of over 120,000 online views on a daily basis.
Our VFX team has completed several projects for locally produced Live Action feature films, such as Manikya, Alludu srinu, Mukunda and several others. We have also confirmed new contracts with other feature film producers. DQE is now in a position to leverage its core animation and VFX strengths to contract more business in this space from North America and Europe
The diligent efforts by our licensing and distribution teams have fructified and several new deals have been closed in the last quarter for our intellectual properties in various territories such as Latin America, South East Asia, USA and parts of Europe.
Completed projects:
Robin Hood, Mischief in Sherwood - 52 x 11' - CGI TV series with Method Animation and TF1 France, ZDF Germany, ATV Turkey, DeA Kids Italy
Lassie & Friends - 52 x 11' 2D HD TV series with Dreamworks Classic Media USA, Super Prod & TF1 France, ZDF Germany
Delicious Valley - 30'Min DVD Team Entertainment
On-going projects:
Peter Pan Season 2 - 26 x 22' CGI TV series with ZDF Germany, De Agostini Italy and Method Animation and France TV
Miles from tomorrow land - 22 X 22 CGI with Wild Canary, USA
Popples - 52 x 11 CGI with Method Animation, France & Saban Group, USA
Lady Bug - 3 x 11 CGI with Zag Toons USA
Sheriff Callie Wild West - 52 x 11 CGI with Wild Canary, USA
7Dwarfs & Me - 52 x 11Live action and CGI with Method Animation, France
Little Prince - Season 3 - 26 x 22' CGI TV series with Method Animation and France TV & RAI
Projects in pipeline:
Jungle Book - Season 3 - CGI TV Series with Story Board Animation and ZDF Germany
Shabiyat - Season 10 - 15 x 13 CGI-Fanar Productions, UAE
Eshafan - 15 x 13 2D- Fanar Productions, UAE
PegHeads - 52 x 11' CGI-i Story Animation LLC, Florida
Pio the Chick - 2D TV series with RAI Trade Italy and Gruppo Alcuni
5 & IT - 52 x 11' CGI TV Series - Disney / Method Animation.
Hive- Season II - TV series with Lupus Films UK
Licensing and Distribution:
Our licensing and distribution efforts have achieved several international successes and are helping to create long-term and sustained value for DQE.
TELEVISION & HOME VIDEO DEALS CONCLUDED IN 3RD QUARTER 2014 | |||||
SERIAL | COMPANY | TITLE | TERRITORY | RIGHTS | |
1 | TF1 | Jungle Book Season 1 | France, DROM, POM, TOM, COM, Monaco & Andorra | Television | |
JB 60' TV Special | |||||
2 | PIWI | Jungle Book Season 1 | France and French speaking Europe and Africa | Television | |
3 | Onevision | Robinhood | Indonesia | Television | |
JB 60' TV Special | |||||
JB X' Mas Special | |||||
4 | BEC | Jungle Book Season 1 | Thailand | Television | |
Lanfeust Quest | |||||
Peter Pan Season 2 | |||||
Jungle Book X' Mas Special | |||||
JB 60' TV Special | |||||
5 | Imagine Media Kids | Lanfeust Quest | Israel | Television & VOD | |
6 | Tiga | JB 60' TV Special | Thailand | Home Video & IPTV | |
Peter Pan Season 2 | |||||
7 | Netflix | Iron Man Season 2 | Latin America | SVOD | |
LICENSING & MERCHANDISING DEALS CONCLUDED IN 3RD QUARTER 2014 | |||||
SERIAL | COMPANY | TITLE | TERRITORY | RIGHTS/CATEGORY | |
1 | Mahima Impex | Jungle Book | India | Kids Apparel | |
2 | Yellow Diamond | Jungle Book | India | Promotion | |
3 | Malayala Manorama | Jungle Book | India | Publishing | |
Issue of bonds, and potential merger & possible AIM cancellation
As set out in DQE's announcement of 9 December 2014, in order to align the interests of shareholders in DQE with that of the holders of the Bonds from time to time, DQE Mauritius has undertaken to OCP Asia (Hong Kong) Limited that it will use its best endeavours to secure a merger between DQE and DQE Mauritius and a cancellation of DQE's trading facility on AIM ("Merger & Cancellation"), before or concurrent with a 'qualified liquidity event', as defined in DQE's announcement of 9 December 2014. This includes procuring the issue of a circular and convening a meeting of DQE's shareholders, procuring a recommendation for the merger and cancellation from the Board of DQE (subject to their fiduciary duties and compliance with applicable laws) and taking such action necessary to enable the merger and cancellation, which would be subject to compliance with the AIM Rules for Companies and the UK Takeover Code. Further announcements in this regard will be made when appropriate.
For further information, please visit www.dqentertainment.com or contact:
DQ Entertainment plc
Tapaas Chakravarti - Chairman and CEO
Rashida Adenwala - Director Finance & Investor Relations
Tel: +91 40 235 53726
Allenby Capital Limited
Jeremy Porter / Alex Price
Tel: +44(0) 20 3328 5656
Buchanan Communications
Mark Edwards/Robbie Ceiriog-Hughes
Tel: +44 (0)20 7466 5000
www.buchanan.uk.com
Below is an extract from the unaudited financial results of DQE India for the third quarter and nine months ended 31 December 2014. The full unaudited results are available from the DQE India section of the BSE website (www.bseindia.com) and NSE website (www.nseindia.com), as well as on DQE's website (www.dqentertainment.com).
Un-audited Consolidated Financial Results for the quarter and period ended 31 December 2014 | |||||||||||||
(Rs in million) | |||||||||||||
Sl.No | Particulars | For Quarter ended 31 December 2014 | For Quarter ended 30 September 2014 | For Quarter ended 31 December 2013 | For nine months ended 31 December 2014 | For nine months ended 31 December 2013 | For Year ended 31 March 2014 | ||||||
(Un-Audited) | (Un-Audited) | (Un-audited) | (Un-audited) | (Un-audited) | (Audited) | ||||||||
1 | Net Income from Operations | 457.10 | 526.41 | 508.51 | 1,189.88 | 1,378.52 | 2,396.79 | ||||||
2 | Expenditure | ||||||||||||
A | Production Expenses | 9.51 | 17.76 | 15.50 | 48.78 | 35.58 | 192.50 | ||||||
B | Employee Expenses | 181.47 | 153.40 | 186.41 | 501.26 | 586.07 | 719.56 | ||||||
C | Other Expenses | 59.26 | 55.51 | 82.60 | 165.62 | 264.32 | 481.54 | ||||||
D | Depreciation, Amortisation and Impairment |
75.63 | 79.77 | 100.45 | 231.65 | 289.65 | 552.99 | ||||||
E | Expenses transferred to Capital Account |
(40.03) | (54.08) |
- | (135.83) | - | (0.35) | ||||||
Total Expenses [2a to 2e)] |
285.84 | 252.36 | 384.96 | 811.48 | 1,175.62 | 1,946.24 | |||||||
3 | Profit / (Loss) from Operations before Other Income, Interest and Finance expense and Exceptional Items [ 1 -2 ] |
171.26 | 274.05 | 123.55 | 378.40 | 202.90 | 450.55 | ||||||
4 | Other Income | 1.68 | 1.77 | 5.61 | 7.61 | 11.17 | 14.47 | ||||||
5 | Profit / (Loss) before Interest and Finance expense and Exceptional Items [ 3+ 4 ] | 172.95 | 275.82 | 129.16 | 386.01 | 214.07 | 465.02 | ||||||
6 | Interest and Finance Expenses | 108.98 | 75.01 | 71.79 | 259.45 | 185.01 | 251.65 | ||||||
7 | Profit / (Loss) after Interest and Finance expense but before Exceptional Items [ 5 - 6 ] | 63.97 | 200.81 | 57.37 | 126.56 | 29.06 | 213.37 | ||||||
8 | Exceptional items * | 37.61 | (73.17) | (0.95) | (39.48) | 326.74 | 234.62 | ||||||
9 | Profit / (Loss) from Ordinary Activities before tax [ 7 - 8 ] | 101.58 | 127.64 | 56.42 | 87.08 | 355.80 | 447.99 | ||||||
10 | Less: Tax expense | 59.20 | (16.68) | 68.81 | 20.96 | 74.67 | 20.29 | ||||||
11 | Profit / (Loss) from Ordinary Activities after tax[ 9 - 10 ] | 42.38 | 144.32 | (12.39) | 66.12 | 281.13 | 427.70 | ||||||
12 | Extraordinary Item | - | - | - | - | - | - | ||||||
13 | Profit / (Loss) for the period [11-12] | 42.38 | 144.32 | (12.39) | 66.12 | 281.13 | 427.70 | ||||||
14 | Paid-up equity share capital [Face value Rs.10 per share] | 792.83 | 792.83 | 792.83 | 792.83 | 792.83 | 792.83 | ||||||
15 | Reserves excluding Revaluation Reserves as per balance sheet of previous accounting year | - | - | - | - | - | 4,249.16 | ||||||
16 | Earnings Per Share [Face value Rs.10 per share](not annualised/ in INR) | ||||||||||||
a) Basic |
0.53 | 1.82 | (0.16) | 0.83 | 3.55 | 5.39 | |||||||
b) Diluted |
0.53 | 1.82 | (0.16) | 0.83 | 3.55 | 5.39 | |||||||
17 | Public Shareholding | ||||||||||||
a) Number of Shares | 19,820,782 | 19,820,782 | 19,820,782 | 19,820,782 | 19,820,782 | 19,820,782 | |||||||
b) Percentage of shareholding | 25% | 25% | 25% | 25% | 25% | 25% | |||||||
c) Shares held by custodians against depository receipts | - | - | - | - | - | - | |||||||
18 | Promoters and Promoter group Shareholding | ||||||||||||
a) Pledged / Encumbered - No. of Shares | 59,461,972 | 17,838,000 |
- | 59,461,972 |
|
- | |||||||
Percentage of shares (as a % of the total share holding of promoter and promoter group) | 100.00% | 30.00% | - | 100.00% | - | - | |||||||
Percentage of shareholding (as a % of the total share capital of the company) | 75% | 22.50% | - | 75% | - | - | |||||||
b) Non encumbered - No. of Shares |
246 | 41,624,218 | 59,462,218 |
246 | 59,462,218 | 59,462,218 | |||||||
Percentage of shares (as a % of the total share holding of promoter and promoter group) | 0% | 70.00% | 100% | 0% | 100% | 100% | |||||||
Percentage of shares (as a % of the total share capital of the company) | 0% | 52.50% | 75% | 0% | 75% | 75% | |||||||
c) Shares held by custodians against depository receipts | - | - | - | - | - | - | |||||||
Consolidated Segment Revenue and Results | |||||||||||||
(Rs in million) | |||||||||||||
Particulars | For Quarter ended 31 December 2014 | For Quarter ended 30 September 2014 | For Quarter ended 31 December 2013 | For nine months ended 31 December 2014 | For nine months ended 31 December 2013 | For Year ended 31 March 2014 | |||||||
(Un-audited) | (Un-audited) | (Un-audited) | (Un-audited) | (Un-audited) | (Audited) | ||||||||
Segment Revenue | |||||||||||||
Animation | 226.10 | 399.35 | 378.83 | 724.74 | 1,070.27 | 1,873.42 | |||||||
Distribution | 231.00 | 127.06 | 129.68 | 465.14 | 308.25 | 523.37 | |||||||
Net Income from Operations | 457.10 | 526.41 | 508.51 | 1,189.88 | 1,378.52 | 2,396.79 | |||||||
Segment Results -Profit/(loss) | |||||||||||||
Animation | 199.26 | 236.18 | 205.60 | 363.93 | 593.39 | 926.54 | |||||||
Distribution | 153.70 | 120.18 | 64.89 | 261.96 | 140.71 | 153.20 | |||||||
Unallocated | (142.40) | (153.71) | (142.28) | (279.36) | (193.29) | (380.10) | |||||||
Segment Results before Interest and Finance Expense and Tax Expenses | 210.56 | 202.65 | 128.21 | 346.53 | 540.81 | 699.64 | |||||||
Interest and Finance Expense | (108.98) | (75.01) | (71.79) | (259.45) | (185.01) | (251.65) | |||||||
Profit / (Loss) before tax | 101.58 | 127.64 | 56.42 | 87.08 | 355.80 | 447.99 | |||||||
Tax expense | 59.20 | (16.68) | 68.81 | 20.96 | 74.67 | 20.29 | |||||||
Profit / (Loss) for the period | 42.38 | 144.32 | (12.39) | 66.12 | 281.13 | 427.70 | |||||||
Capital Employed | |||||||||||||
Animation | 2,785.29 | 2,603.90 | 1,958.95 | 2,785.29 | 1,958.95 | 2,246.73 | |||||||
Distribution | 6,319.40 | 6,043.15 | 7,011.43 | 6,319.40 | 7,011.43 | 6,031.86 | |||||||
Unallocated | (4,159.48) | (3,734.17) | (3,986.90) | (4,159.48) | (3,986.90) | (3,236.60) | |||||||
Total | 4,945.21 | 4,912.88 | 4,983.48 | 4,945.21 | 4,983.48 | 5,041.99 | |||||||
Notes | |||||||||||||
1) The un-audited consolidated financial results for the quarter and period ended December 31, 2014 have been taken on record by the Board of Directors at its meeting held on 13th February 2015. The "Un-audited Consolidated Financial Results" have been subjected to the limited review by statutory auditors of the company. | |||||||||||||
2) Pursuant to Clause 41 of the Listing Agreement, the Company opted to publish only the Consolidated Results of the Company. Investor can view the Standalone results of the Company on the Company's website "www.dqentertainment.com" as well as the website of BSE (www.bseindia.com) and NSE (www.nseindia.com). | |||||||||||||
3) Certain Standalone Information of the Company. | |||||||||||||
(Rs in million) | |||||||||||||
Particulars | For Quarter ended 31 December 2014 | For Quarter ended 30 September 2014 | For Quarter ended 31 December 2013 | For nine months ended 31 December 2014 | For nine months ended 31 December 2013 | For Year ended 31 March 2014 | |||||||
| (Un-audited) | (Un-audited) | (Un-audited) | (Un-audited) | (Un-audited) | (Audited) | |||||||
Net Income from Operations |
414.27 | 527.45 | 308.05 | 1,084.06 | 1,134.78 | 1,798.10 | |||||||
Profit / (Loss) before tax |
181.98 | 196.38 | (73.98) | 245.37 | 259.82 | 377.38 | |||||||
Profit / (Loss) after tax |
122.79 | 213.06 | (142.79) | 224.42 | 185.15 | 363.56 | |||||||
4) Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended December 31, 2014: | |||||||||||||
Nature of complaints | Opening Balance | Received during the quarter | Disposed during the quarter | Closing Balance | |||||||||
Investor complaints | - | 4 | 4 | - | |||||||||
5) Effective from April 1, 2014 the company has revised the useful life of the fixed asset based on the schedule II to the Companies' Act 2013, for the purposes of providing depreciation on fixed asset. Accordingly the carrying amount of the assets as on April 1 2014 has been depreciated over remaining revised useful life of the fixed assets. Consequently, the depreciation for the half year ending 31 December 2014 is lower and the Loss before tax is lower to the extent of Rs. 19.41 mn. Further an amount of Rs. 44.79 mn (Net of Deferred taxes Rs 30.25 mn) representing the carrying amount of the asset with revised useful life as NIL has been charged to the opening balance of retained earnings as on April 1, 2014. | |||||||||||||
6) *Exceptional items are notional foreign exchange gain / (loss) arisen on foreign exchange fluctuation calculated on translation of monetary items as per Accounting Standard -11 | |||||||||||||
7) Corresponding year and quarter end figures have been regrouped / reclassified wherever necessary. | |||||||||||||