Ku6.com’s Financials Show Chinese Internet Video Sector Instability
Chinese online video and television services company Ku6 Media Company Ltd. today announced its unaudited financial results for the first quarter of fiscal year 2011, and said that sequential quarterly revenue slightly dropped.
Total revenues from continuing operations were USD6.6 million, up 178.5% from USD2.4 million in the first quarter of 2010, and down 3.0% from USD6.8 million in the fourth quarter of 2010. Net loss from continuing operations was USD10.9 million, an increase of 9.9% from a loss of USD9.9 million in the first quarter of 2010, and a decrease of 29.6% from a loss of USD15.4 million in the fourth quarter of 2010.
In 2010, Ku6 Media, which was formerly known as Hurray, completed a series of transaction including acquisition of Ku6 in January 2010 and disposal of its wireless value-added services and music businesses to Shanda Interactive Entertainment Limited as well as acquisition of online audio business from Shanda in August 2010, and became a company focusing on online advertising business on its online video platform of www.Ku6.com.
As a result, the company says the operating results of WVAS and recorded music were presented as operating results of discontinued operations in the company’s income statements. In addition, Ku6 says the results of operations for the first quarter of 2011 and the fourth quarter of 2010 may not be entirely comparable to those for the first quarter of 2010, which included the consolidated operating results of Ku6 for the two months after the acquisition was completed in January 2010 only.
Operating expenses from continuing operations were USD9.1 million in the first quarter of 2011, down 7.1% from USD9.8 million in the fourth quarter of 2010 and up 65.0% from USD5.5 million in the first quarter of 2010.
Net loss from continuing operations was USD10.9 million in the first quarter of 2011, a decrease of 29.6% from the loss of USD15.4 million in the fourth quarter of 2010 and an increase of 9.9% from the loss of USD9.9 million in the first quarter of 2010. Net loss from discontinued operations –WVAS and recorded music businesses — was reportedly nil in the first quarter of 2011 and the fourth quarter of 2010 since the WVAS and recorded music businesses were sold in August 2010, as compared to USD1.2 million of net loss in the first quarter of 2010.
Net loss attributable to Ku6 Media was USD10.8 million in the first quarter of 2011, as compared to USD15.4 million in the fourth quarter of 2010 and USD10.9 million in the first quarter of 2010.
As of March 31, 2011, Ku6.com had USD17.2 million in cash and cash equivalents, compared to USD27.3 million as of December 31, 2010.