Lionsgate charged US$50.5 million in incremental costs in the fourth quarter as a direct result of the COVID-19 pandemic, the entertainment company reported Thursday (May 21), as its global OTT paid subscribers rose to 10.6 million, up from 8.6 million in the third quarter,
The charge included “certain motion picture and television impairments” and development charges associated with “changes in performance expectations” and the “feasibility of project completions,” along with costs associated with pausing film and television production.
Lionsgate stated it expects to incur “additional incremental costs” in the future as a result of the pandemic, and is in the process of seeking insurance recovery for those costs.
Total revenue inched slightly higher to $944 million from $913.7 million in the year-ago quarter, despite $12 million in operating losses. Net loss attributable to Lionsgate shareholders came to $45 million.
Adjusted diluted earnings per share (EPS) was $0.21.
Media networks segment revenue went largely unchanged from the prior year quarter at $358 million while segment profit of $26 million was “impacted by the continued investment in Starzplay’s international expansion.”
Subscriber growth was driven by “strong sequential quarter gains” at Starz, according to the company’s fiscal update, to 6.8 million domestic OTT paid subscribers.
Despite those gains, Lionsgate stated the increase “may not be indicative of future results and growth may slow as governmental and other restrictions are relaxed, and as a result of the current and possible longer term negative economic impact of the pandemic.”
Television production segment revenue was $258 million — down from $273 million in the prior-year quarter — and segment profit was $22 million, driven in part by strong library sales.
Lionsgate reported full year revenue of $3.89 billion, up from $3.68 in 2019.
“We reported a strong quarter to end a solid fiscal year despite the disruption posed by the COVID-19 global pandemic,” Lionsgate CEO Jon Feltheimer said in a statement. “Starz is continuing to deliver great entertainment to our audiences in the current at home environment, and we’re working closely with all of our content partners to ensure that when production resumes and theatres re-open, we will be ready.”