Hong Kong’s dominant broadcaster TVB swings to a loss of US$25.3 million on investment write-off
- Company forecasts a challenging year ahead in Hong Kong, but expects a boost from its mainland China expansion
Hong Kong’s dominant broadcaster TVB posted a net loss of HK$199 million (US$25.3 million) for 2018, down from a net profit of HK$243 million a year earlier, mainly because of a write-off on bond holdings issued by Chinese theatre operator SMI Holdings Group.
Television Broadcasts (TVB), held under parent film production company Shaw Brothers, said it had written off HK$500 million on its holdings of SMI Bonds, according to a filing on Wednesday night to the Hong Kong exchange.
“Hong Kong business will still face challenges in 2019. But we expect the loosening of advertising regulations will drive growth,” the company said in the filing.
“Mainland China is the main market for our business expansion. We will continue pursuing growth opportunities in programme production and distribution.”
Hong Kong broadcaster TVB warns it will lose HK$200 million for 2018 financial year
Without the write-off, TVB would have reported a profit of HK$301 million, the filing said.
The company also reported a 3 per cent year-on-year in revenue to HK$4.44 billion for last year, but below a consensus estimate of HK$4.68 billion.
The board has suggested to pay shareholders a fourth-quarter dividend of 70 Hong Kong cents per share, taking annual dividends to HK$1 per share.
The loss did not come as a surprise.
Last week, TVB issued a profit warning, saying it expected to post a HK$200 million net loss for 2018.
In June, TVB laid off around 100 staff amid what it said was a shift of strategy in a competitive market.
Last September, SMI Holdings was suspended from trading in Hong Kong over debt and management concerns, with its shares having shed 39.8 per cent in the 12 months prior.
The company produces, distributes and licenses on-screen entertainment and operates entertainment complexes in mainland China.
In December, SMI Holdings said in a filing that senior company leaders had resigned, and admitted to owing HK$108 million in employee salaries, HK$200 million in outstanding cinema rent payments, and 150 million yuan (US$21.7 million) for film distributors’ licensing fees.
