SINGAPORE (Nov 14): Spackman Entertainment announced that it made a loss of US$770,000 ($1.05 million) in 3Q17, compared to earnings of US$1.47 million in 3Q16.
Revenue for the quarter dropped by 35% to US$1.75 million from US$2.70 million a year ago, due to a decrease of US$1.85 million from production of films as the percentage-of-completion for Golden Slumber in 3Q17 was lower compared to that for Master in 3Q16.
The weaker topline was partially offset by an increase of US$0.82 million from leasing of equipment to third parties by Frame Pictures.
Cost of sales decreased 57% to US$1.12 million from US$2.58 million last year, due to a decrease of US$1.78 million from production of films in line with the decrease in revenue from production of films in 3Q17; and partially offset by an increase of US$0.27 million from distribution of films and others due to several motion films distributed by the group in the quarter.
As a result, gross profit for 3Q17 came in at US$634,000, a more than fivefold increase compared to US$120,000 recorded in 3Q16.
Other income dropped 98% to US$0.05 million compared to US$2.86 million in the previous year, mainly because there was an absence of non-recurring gain on disposal of subsidiaries and the loss on film borne by external investors as explained above.
Selling expenses increased by 85% to US$191,000 compared to US$103,000 last year.
General and administrative expenses were up by 44% to US$1.45 million from US$1.01 million a year ago, mainly due to the acquisition of Frame Pictures which resulted in an increase in depreciation and amortisation, service fee and rental expenses.
In its outlook, the group expects both its wholly-owned subsidiaries, Studio Take and Frame Pictures, to be on track to deliver a healthy pipeline of quality projects that will strategically add accretive value to the group.
The group has also been preparing to enter into the Korean drama series production and is presently looking out for more opportunities to foray into this business segment in order to capitalise on the rising popularity of Korean drama in Southeast Asia.
Shares in Spackman closed at 11 cents on Tuesday.
