Cinram posted fourth quarter net profit of $48m on revenue of $616.7m – a 26% increase over the same period in 2005 when the company recorded a net profit of ¢38.2m on revenue of $650m. However, for the full year 2006, net profit fell 59.4% to $51.7m on revenue of $1.94bn from $82.4m on revenue of $2.1bn the year before.

Fourth quarter DVD revenue was up three per cent to $351.5 million from $339.8 million in 2005 principally as a result of a relatively strong release slate from all our major customers. DVD revenue was down six per cent to $1.0 billion from $1.1 billion in 2005

“The fourth quarter of 2006 was the best fourth quarter on record for Cinram across a number of measures, including DVD unit volume,” said Cinram chief executive officer, Dave Rubenstein. “The surge in DVD volume experienced in the fourth quarter demonstrates the further compression we are seeing in the seasonality of the business. This year, we hope to benefit from a more robust release schedule coupled with increased production capacity to service peak demand requirements; however, the positive effect of increased volume and capacity will likely be offset by price declines.” Rubenstein predicted that DVD volumes will likely "flatten out" in 2009.

Cinram recorded fourth quarter and full-year high-definition disc revenue of $2.8 million and $5.6 million, respectively, following the June retail launch of both formats. The company have replicated 180 HD-DVD and Blu-ray titles for customers in North America since the launch.

Cinram has a 2006 replication capacity of 1.8bn DVDs expecte to increase by 9%. Last year, HD lines could manufacture 42 million high-definition discs, a production capacity expected to grow 60%.

North America accounted for 73% and Europe 27% per cent of full-year global consolidated revenue.

European revenue decreased nine per cent in the fourth quarter to $179.0 million from $196.8 million in 2005. The decline in DVD and CD revenue was partially offset by increased distribution revenue due to additional volume in Europe. On a full-year basis, European revenue was down four per cent to $522.0 million from $541.8 million in 2005.

Story filed 11.03.07