GDC Financial Results

http://www.digitalcinemainfo.com/gdctechnology_08_15_08.php

 

August 15, 2008

 

Source: GDC Technology, Variety Asia

 

Global Digital Creations fell sharply from profit to loss as the promised digitalization of the world movie industry proved just out of reach. But the company is doubling its bets on the China market.

 

 

The Hong Kong-listed company, which operates as a primary supplier of digital cinema equipment and also as a computer graphics house, revealed losses of HK$58.5 million for the six months to June, compared with profits of HK$40.5 million in the first half of last year. Revenues slipped from HK$40.1 million to HK$31.2 million.

 

 

The company invested heavily in a joint venture company with China Film Group that at the end of June had 450 digital cinemas in operation in 27 provinces around China. But GDC's revenues, derived from a share of the box office, slipped in the period.

 

 

The company issued a gloomy statement about the current state of the global 'virtual print fee business' but said that the Chinese business is about to turn the corner.

 

 

The "slowdown of the negotiations of VPF between the Hollywood studios and the major exhibitors in the U.S. and the current banking crisis in the U.S. threw more doubts into the deployment of digital cinemas, it was expected that deployment worldwide would be delayed." For China, however, it said "because of the booming economy and strong domestic consumption in the PRC it is expected that box office will increase further (and) increase the deployment of digital cinemas. The performance of the PRC Digital Cinema Project will improve accordingly."

 

 

At the recent ShoWest convention it launched a server for 3D projectors that it claims is the only one capable of meeting DCI stereoscopic specifications.

 

 

GDC's CG creation and production business dived during the half, but the company similarly talks of imminent recovery. "Since late 2007 several clients postponed the commencement of their production plans (which) resulted in lower revenue and incurred loss," it said. But it says that most of its orders were eventually confirmed and that the unit will return to profit by the year end. Company is in fact expanding its CG business with the construction of a new production studio in Chongqing which it will open at the end of 2008.