Flying Swords Lifts Bona Group Results

2012-03-05 13:53:07        Chinese Films

A still photo of "Flying Swords of Dragon Gate" [Photo: fimbusinessasia]

Chinese studio Bona Film Group Ltd saw net income rise by 70% to $18.8 million in 2011 on revenues that grew 139% to $126 million.

The company received a huge boost from Flying Swords of Dragon Gate, which was China's fourth biggest domestic film of all time and accounted for nearly a quarter of Bona's annual turnover. However the high costs of producing the 3-D, IMAX film had a depressing effect on profit margins during the period.

The film's long-term ancillary value was demonstrated by the RMB22 million ($3.49 million) it achieved in internet rights sales. Total internet rights income for the year was worth over RMB100 million ($15.9 million).

International sales were worth $13 million to the group, with Flying Swords and The Sorcerer and the White Snake together accounting for $7.8 million.

Bona released 15 films in 2011, making it the second biggest distributor after China Film Group. Its other hits included Overheard 2 and Treasure Inn. In the current year it expects to release 16-20 titles, a combination of its own titles, negative pickups and straight acquisitions. These include the upcoming mainland release of award winning A Simple Life.

Group CEO, YU Dong said that Bona's role in the distribution of imported titles is expected to rise, from just one film in 2011 to perhaps four in 2012. These include The Three Musketeers, which it will release for the May Day holiday in the second quarter. Imports will also flow from China Lion Film Distribution Inc, the overseas distribution company in which Yu confirmed that Bona had taken a 20% investment stake last year.

The group's theatre business expanded significantly. It ended the year with 11 complexes and 95 screens. But delayed permits for two complexes in Beijing and one in Dongguan mean that three further complexes are completed, but not yet operational. By the end of 2012 Bona aims to have more than 21 multiplexes in operation.

The Chinese film market is expected to grow again in 2012 by a further 30% to some RMB17 billion ($2.69 billion), with forecast theatre numbers expanding from some 9,100 nationwide at the end of 2011 to 12,500 this year.

Bona said that its revenues could grow by 70% this year. It issued guidance that non-GAAP net income could rise from the $18.2 million it reported this time, to $22 million. The forecast figure is held back by a sharply rising tax bill, which finance director Mason XU (who is soon to leave the group) said the company will try to reduce through negotiations with local tax authorities.

Source: Film Business Asia

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