Chinese digital media firm Focus Media (FMCN) announced its unaudited financial results for the first quarter ended March 31, 2008 and said net loss was USD53.8 million, which includes a non-recurring loss of USD79.3 million resulting from the restructuring of its lackluster mobile handset advertising business.
More bad news came in a statement from CEO Dr. Tan Zhi, "The recent earthquake in Sichuan province will have a negative impact on our operations in the second quarter, especially to advertising revenues from our networks in the earthquake region, namely Chengdu and Chongqing."
Focus Media reported total revenues from continuing operations of USD161.6 million, an increase of 214.7% compared to USD51.3 million for the first quarter of 2007. Total digital out-of-home advertising revenue was USD108.7 million in the first quarter of 2008, an increase of 113.4% from USD51.0 million in the first quarter of 2007. In the first quarter of 2008, commercial location advertising revenue, outdoor LED and movie theatre advertising, was USD62.3 million, contributing 57.3% of total digital out-of-home advertising revenue. Advertising service revenue from the company's in-store network was USD17.3 million, or 15.9% of total digital out-of-home advertising revenue. Advertising service revenue from in-elevator poster frame network placed primarily in the elevators of residential complexes was USD29.2 million in the first quarter of 2008, or 26.8% of total digital out-of-home advertising revenue.
Internet advertising service revenue was USD49.6 million in the first quarter of 2008, lower than USD57.2 million in the fourth quarter of 2008 due to seasonality, as the first quarter has historically been the company's weakest quarter for advertising revenues.
As of March 31, 2008, the total installed base of LCD displays and digital frames in Focus Media's commercial location network was 119,240 nationwide, including 114,426 displays through directly owned networks, and 4,814 displays through regional distributors. The total number of displays installed in in-store network — including CGEN — was 61,420 as of March 31, 2008. The total number of non-digital frames available for sale on its poster frame network was 225,473 as of March 31, 2008.
Gross profit for the first quarter of 2008 was USD65.5 million, representing an increase of 129.7% compared to USD28.5 million in the first quarter of 2007.
In the first quarter of 2008, operating expenses totaled USD39.2 million, including USD3.3 million in acquired intangible asset amortization resulting from acquisitions and non-cash share-based compensation expense of USD8.3 million.
First quarter 2008 operating cash flow was USD7.6 million.
Focus Media estimates its total revenues for the second quarter of 2008 will range from USD190 million to USD195 million.