BlueFocus has released its preliminary financial results ahead of its formal report next month and revealed a massive drop in profits compared to 2014.
The holding company’s financial results for 2015, which may be adjusted before it’s formal financial report is disclosed in April, show that operating profit excluding asset depreciation and impairment of goodwill, was 440 million yuan (US$67.5 million), which is 51.7 percent lower than 2014.
Moreover, including the line items aforementioned, total operating profit was roughly -447 million yuan (-US$68.6 million), a colossal 149 percent lower than 2014.
BlueFocus’ preliminary figures do not give breakdowns regarding each unit of its business.
In the announcement, the holding company makes plain that the significant losses are due to the fallout from China’s stuttering growth and financial crisis.
BlueFocus experienced huge increases in financial expenditure due to its "high level of liability" from interest payments on bank loans and bond issues, which had "a noticeable impact on the profit".
The holding company also saw massive long-term asset depreciation because of "market change and business adjustment" in 2015, naming subsidiaries Bojie Media, advertising firm Kingo, and social media agency We Are Social as being particularly affected.
However, the company attributes some of the loss to heavy investment in its digital businesses and other new fields, which are in their early stages in terms of producing profit in 2015.
BlueFocus said its rapid digital development, together with its efforts to grow globally, were key drivers of its significant revenue increase in 2015. The agency declared revenue of 8.6 billion yuan (US$1.32 billion) for 2015, which is 44.3 percent higher than 2014’s figure.
The holding company also says its experienced steady organic growth and it included the financial results of Vision 7 International and Lan Han (Shanghai) Technology because the acquisitions were completed at the end of 2014 and mid-2015 respectively.