MEEG reports first quarter net profit of $8.07 million

March 16, 2021

Main Events Entertainment Group, for the three months ended January 2021, reported revenues of $175.84 million, 71% lower than the $598.14 million booked in 2020. Management noted that, “our M-Style product together with our western operations contributed $21.909 or 12% of revenues this quarter, compared to $110.193 or 18% in the corresponding period, 2020. This is an 80% decline year over year and is reflective of the impact of the nightly curfews and government regulations on public gatherings on our core business.”

Cost of Sales decreased 80% to close at $65.11 million (2020: $325.46 million), this resulted in gross profit decreasing by 59%, amounting to $110.73 million for the period relative to $272.68 million in 2020. The Company noted that, “our gross margins are higher. This is due to a higher percentage of revenues coming from recurring services in digital signage.”

Other income for the quarter closed at $16,000 (2020: $306,000).

Total expenses amounted to $101.37 million (2020: $197.27 million) for the period under review, a 49% decrease when compared to the prior year. Of that, administrative and other expenses declined by 61%, moving from $161.62 million in 2020 to $63.72 million for the period under review. Selling and promotions fell 80% to $829,000 from $4.22 million reported in 2020. Depreciation rose 1% to total $31.64 million for the period (2020: $31.43 million). Management noted that, “the most significant decline occurred in employee costs, as most of our complement continue to work at reduced capacities. Significant savings have also been realized from the suspension of most discretionary spending on travel, entertainment, advertising, and promotion.”

As such, operating profit decreased by 88% from $75.72 million in 2020 to $9.38 million for the period under review. Finance costs decreased by 46% to close the period at $2.38 million (2020: $4.37 million). “The decrease results from lower interest on bank debt due to lower debt levels,” as per MEEG.

Profit before taxation decreased by 90% to close the period at $7 million (2020: $71.35 million). Notably, MEEG reported a tax credit of $1.07 million relative to the tax charge of $1.34 million booked for the three months ended January 31, 2020. Thus, net profit amounted to $8.07 million (2020: $70.01 million).

Consequently, earnings per share (EPS) for the quarter amounted to $0.03 compared with $0.23 for the corresponding period of last year. The trailing twelve months loss per share amounted to $0.27.  The numbers of shares used in the calculations are 300,005,000 units.

Balance Sheet at a glance:-

Main Events total assets base as at January 2021 closed at $810.44 million relative to $1.05 billion a year prior. The decrease in total assets was largely due to decreases in ‘Receivables’ and ‘Property Plant and Equipment’ which declined by 715 and 16%, respectively to close at $77.36 million (2020: $270.65 million) and $546.77 million (2020: $652.80 million), respectively.

Equity attributable to stockholders of parent amounted to $541.68 million (2020: $648.85 million) with book value per share amounting to $1.81 (2020: $2.16).

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