Ku6 Media Posts Results From Its China Internet Business
China-based Ku6 Media Company Ltd., which previously flew its technology media brand under the name Hurray Holding, announced that its net loss narrowed as it presented unaudited financial results for the third quarter ended September 30, 2010.
Total revenues from the company’s continuing operations, representing advertising revenues contributed by online video portal and online radio operations, grew to USD4.0 million in the third quarter of 2010, up 35.1% from USD2.9 million in the second quarter of 2010. Net loss from continuing operations narrowed to USD12.7 million in the third quarter of 2010, a decrease of 18.0% from a loss of USD15.5 million in the second quarter of 2010.
This was a busy for Ku6, as it tried to transition from its dying older wireless business model. On August 17, 2010, Ku6 Media sold its wireless value-added services and recorded music businesses to Shanda Interactive Entertainment Limited in exchange for an aggregate of USD37,243,904 in cash and acquired 100% equity interest of Shanghai Yisheng Network Technology Company Ltd., an online radio business, from Shanda in exchange for 415,384,615 newly issued ordinary shares and a minority shareholder in exchange for 138,461,539 newly issued ordinary shares, respectively. Ku6’s numbers issued today present the results of Yisheng and WVAS and recorded music businesses prior to the disposal to Shanda.
The company said that because Ku6 was acquired in January 2010 and Yisheng was assumed to be transferred from Shanda from August 2009, the results of operations for the three and nine months ended September 30, 2010, including Ku6’s online video business and Yisheng’s online radio business as well as the WVAS and recorded music business presented in discontinued operations before disposal may not be comparable to those ended September 30, 2009, which only included Yisheng’s operating results from August 2009 and the WVAS and recorded music business in discontinued operations.
Gross loss of continuing operations was USD5.6 million in the third quarter of 2010 compared with a gross loss of USD8.7 million in the second quarter of 2010. The decrease in gross loss was mainly because of the increase in revenue and reduction in cost.
Operating expenses of continuing operations were USD7.1 million in the third quarter of 2010 and compared with USD6.8 million in the second quarter of 2010.
Net loss from continuing operations was USD12.7 million in the third quarter of 2010, a decrease of 18.0 % from a loss of USD15.5 million in the second quarter of 2010.
Net loss from discontinued operations was USD0.4 million in the third quarter of 2010. The net income of discontinued operations in the second quarter of 2010 amounted to USD2.9 million, which included a gain of USD4.5 million from the disposal of Beijing Huayi Brothers Music Company Ltd (“Huayi Music”) in May 2010. Net loss of discontinued operations in the third quarter of 2009 was USD3.0 million. Excluding the gain from disposal of Huayi Music, the sequential decrease of net loss from discontinued operations was mainly due to the restructure of certain WVAS businesses and resources.
As of September 30, 2010, the company had USD40.1 million in cash and cash equivalents, compared to USD13.8 million as of June 30, 2010, and USD49.7 million as of December 31, 2009.