Studio Babelsberg Expects Operating Loss for the Current Fiscal Year

02.11.2011

Despite two big-budget international theatrical film productions, Studio Babelsberg AG (ISIN DE000A0D9UR4, WKN A0D9UR) expects an operating loss for the fiscal year 2011, caused by a lower than expected capacity workload and use of production-related services in the third and fourth quarter. Revenue and profit of Studio Babelsberg are closely tied to the production of individual film projects. The overall market suffers from a worldwide reduction of film projects with budgets of EUR 25-50M and has become increasingly competitive due to the implementation and expansion of more attractive subsidy schemes in other countries. Management had expected to sign at least one more big-budget production for the second half of 2011. In addition, investments made into the Dark Castle Slate in 2008 did not lead to the expected production workload for the studio.

Aside from a number of German language film projects, including Rubbeldiekatz by Detlev Buck and Zettl by Helmut Dietl, the Studio’s capacities were filled in the first half of 2011 by Hansel and Gretel: Witch Hunters, a commissioned production by U.S. major studio Paramount Pictures, featuring Jeremy Renner and Gemma Arterton in the leading roles. X-Filme is currently in production on Cloud Atlas with Tom Hanks, Susan Sarandon and Hugh Grant on the Studio’s lot, directed by Tom Tykwer and Andy and Lana Wachowski.

In 2010, Studio Babelsberg earned a profit with a total of five international productions, including Roland Emmerich’s Anonymous and The Three Musketeers. Both are currently in theaters. Despite unsatisfying recent developments in 2011, management has an optimistic outlook for positive developments in 2012. Studio Babelsberg AG will publish final earning figures for the fiscal year 2011 in the spring of 2012.