Everest losses punish GigaMedia numbers
Full-year results first since appointment of John Stringer as CEO " calls business model "dysfunctional".
A non-cash investment loss of US$36.3m in Q4, tied to its part-ownership of Everest Gaming, has hit GigaMedia’s figures both for the fourth-quarter and for the full financial year.
The company, which has a 40% stake in Everest, saw its revenues drop by 47% year-on-year to $34.4m for the full-year, while the $7.4m in revenues from the fourth quarter represents a 17% year-on-year decline. Full-year gross profit of $19.1m, meanwhile, was down 56% year-on-year, although it increased 45% in the fourth quarter compared to the corresponding period in 2010, coming in at $4.1m.
GigaMedia has halved its losses from operations for the 2011 financial year, but still recorded a loss of US$24.1m for the 12 months ended 31 December.
The company appointed Yichin Lee as its chief executive in March last year, but he lasted less than 12 months before being replaced by John Stringer, who was joined by new CFO Dirk Chen.
Last year also saw the company lose its COO and President Thomas Hui who left at the end of 2011 to devote more time to personal interests and charity projects.
Stringer said in a statement: “Business unit deconsolidations resulted in sharp revenue declines in 2011…Unfortunately, costs and expenses were not adjusted quickly enough in response, leaving a dysfunctional business model.”
“We look forward to updating our progress in 2012, confident in our ability to deliver improved performance by year-end,” he added.
Late last year, following assertions from then-CEO Lee that the company would “change course”, GigaMedia announced a new partnership with Canadian development studio City State Entertainment. It was also at risk of delisting from the Nasdaq at one stage last year, but avoided this eventuality.