Constantin feels B.O. pinch

Losses grow after weak year and pic writedowns

By ED MEZA

BERLIN -- Last year's B.O. downturn has hit Germany's biggest indie producer-distrib, Constantin Film, in the hip pocket, with net losses widening to €9.9 million ($12 million) in 2003 from $1.3 million a year earlier.

Writedowns on pics from output deals with Spyglass Entertainment and USA Films -- "The Recruit," "Shanghai Knights" and "21 Grams" -- and a devaluation of TV licenses added to the damage.

Revenue in 2003 was down 13% to $139 million. TV rights sales were the company's biggest source of revenue, contributing $38 million -- up $9.2 million.

The group's operating loss of $14.3 million, before interest and tax, was down considerably from the previous year's operating profit of $5.8 million but in line with revised figures announced in August.

Company's growing focus on homegrown product is reflected in inhouse investments last year, which grew by 216% to $132 million. Much of that cash went into upcoming pics like "Resident Evil -- Apocalypse" and WII epic "The Downfall" as well as recent releases like high-speed actioner "Autobahnraser" and the animated "Werner -- Gekotzt wird spaeter," as well as continued production of TV series "Bewegte Maenner" and "Hausmeister Krause," both for commercial web Sat 1.

Additional costs included consulting charges for the takeover of nearly 60% of Constantin by Swiss distrib Highlight Communications as well as writedowns on other assets, including a majority stake in advertising and marketing outfit Innovum.

Company is reporting an optimistic assessment for its 2004 fiscal year, due in part to its increased inhouse production, which it said would result in a strong distribution lineup this year.

Group foresees an increase of more than 55% in sales to over $220 million and an operating profit (earnings before interest and tax) of at least $7 million in 2004.