EMI Loses $802 Million
By: Bruce Houghton
(UPDATED) In its report to investors this morning, EMI detailed a net loss of 512 or US $802 million. The company also wrote off another 602 million...
... ($943M USD) in 2009-2010 and despite a recent round of refinancing still has 3 billion ($4.7B USD) in outstanding debt.
Just in case investors think that things can't get much worse, EMI also forecast that it may need another cash infusion as early as next year and that it will fall short of its banking covenants (the financial requirement of its lenders) every year until at least 2015. "EMI Music continued to be challenged by the overall decline in physical sales, which has not yet been fully offset by growth in digital sales."
iTunes' Domination plus EMI Puts Postive Spin On Numbers
"The substantial dependence on a limited number of online music stores, in particular the iTunes Store, for the online sale of music recordings, and the resultant significant influence that they can exert over the pricing structure for online music stores," created a growing risk to future profitability according to the report.
The good news?Sales from recorded music were up 6.5% from the previous year and music publishing sales were up 2.1%.
Here's theEMI press releaseputting a postive spin on the same numbers:
MALTBY CAPITAL LIMITED ANNOUNCES SIGNIFICANTI MPROVEMENT IN OPERATING PERFORMANCE AT EMI FOLLOWING A YEAR OF CREATIVE SUCCESS
(London, 18 August 2010): Maltby Capital Ltd, the parent company of EMI, has today published EMI's annual review for the year ended March 31st 2010.
*after restructuring costs but before accounting impairment charges on goodwill and intangible assets
Read the full report here.Comments
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About the Author:
Bruce Houghton is a 25 year music industry veteran who owns booking agency Skyline Music and the tour marketing company Skyline Innovations.
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