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Cinram Reports Annual Loss

6 Mar, 2008 By: Chris Tribbey

Cinram International Income Fund March 6 reported a 2007 net loss of more than $300 million, primarily due to a poor fourth quarter. However, Cinram CEO Dave Rubenstein expressed hope that a winner in the format war would help the replicator grow its already large home video segment.

“We have some Blu-ray capacity in place today,” Rubenstein told The Associated Press. “As Blu-ray becomes more of a common mass-market item, then I think the stores will convert over shelf space from standard-definition DVD to Blu-ray.

“I don't think you're going to see any near-term change in the shelf space allocated today.”

Cinram was working with both HD DVD and Blu-ray, and Rubenstein told the AP he did not believe Cinram would be adversely affected by HD DVD's demise.

“The nice thing about HD [DVD] was that the lines are very capable of making DVDs with zero modification, so there's very little equipment that will be made redundant,” he said. “We can even repurpose the quality-control equipment from HD [DVD] to Blu-ray, so there's very little that will become obsolete.”

The bulk of Cinram's business remains in home video replication, with both fourth-quarter 2007 and year-over-year profits in that segment improving significantly. Cinram's CD replication and printing operations both saw losses in the fourth quarter and year over year.

In 2007 Cinram added Ditan Corp., a U.S. video game company, and signed a packaging supply agreement with Motorola.

“We generated increased revenue as a result of increases in home video replication and distribution, the Ditan acquisition, and the new handset distribution initiative,” Rubenstein said. “These gains were partially offset by reductions in our printing and CD businesses.”

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