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DQ Entertainment Q2 net down 14.5% to Rs 21.31 cr

MUMBAI: Hyderabad-headquartered animation, gaming, live action entertainment production and distribution company DQ Entertainment (DQE) has posted a net profit of Rs 213.06 million for the quarter ended 30 September 2014. Compared to the net profit of Rs 24.92 crore (Rs 249.20 million) in the year-ago period, the figure implies a drop of 14.5 per cent.

Revenue for the quarter stood at Rs 52.64 crore (Rs 526.41 million), as against Rs 56.58 crore (Rs 565.76 million) registered in the year-ago period.

Its revenue from production business was at Rs 39.93 crore (Rs 399.35 million), compared to Rs 41.57 crore (Rs 415.71 million) a year ago. Revenue from distribution business was at Rs 12.71 crore (Rs 127.06 million), compared to Rs 15.01 crore (Rs 150.05 million) in the year-ago period.

DQE’s operating profit (EBITDA) in the quarter dropped to Rs 35.38 crore (Rs 353.82 million) from Rs 39.02 crore (Rs 390.17 million) in Q2FY14.

DQE said that it has commissioned new productions only in July and early August, and the revenues from these projects are expected to come in from the third quarter onwards. These include ‘Seven Dwarfs & Me’, ‘Lady Bug’, and ‘Delicious Valley and Poppies’.

In regard to the company’s own IP, it has commenced the production of the second season of the ‘Peter Pan’ TV series while a third season of the ‘Jungle Book’ TV series is in development. In addition, the productions of ‘Lassie and Robin Hood’ are ongoing.

“The market generally remains buoyant. However, the delay in the commencement of productions will mean we are unlikely to meet market expectations for the year to 31 March 2015 with regard to our revenue forecasts from production, but with expectation of a good performance from licensing and distribution, we remain on track to meet market expectations of profit before tax for the year to 31 March 2015,” the company said.

It also added that while it has concluded its discussions for financing the development and production of its properties and is completing the documentation process, working capital remains under pressure in the meantime.

Meanwhile, DQE has launched two YouTube channels as part of its new digital media strategy. The channels, Power Kids and Tiny Toonz, are created in association with multi-channel network Whacked Out! Media.

“The Company has formulated its digital platform strategy to exploit its substantial library of over 700 hours of children’s animated content produced by the company. This will encompass all platforms such as apps, tablets, smartphones, social media and You Tube with the intent to develop a strong and sustainable digital content strategy,” it said.

“Our plans are also underway to launch content and games on other popular digital platforms such as Google Play Store, Amazon, iTunes, etc. Our VFX teams has successfully completed several projects for locally produced live-action feature films and have now more projects in the pipeline. With the increasing demand for visual effects (VFX) content for animated feature films, live action thrillers and action films and sci-fi films from Hollywood, Europe and Japan, DQE is all set to leverage its core strengths and capitalise on this opportunity,” the company added.