MEEG’s Earnings Dip as Revenue Declines and Expenses Rise

  • Main Event Entertainment Group Limited (MEEG) reported a net loss of J$9.34Mn for the second quarter ended March 30, 2025, down from a net profit of J$20.02Mn in the prior year’s comparable period. The decline came against the backdrop of weaker revenue performance.
  • Revenues for the quarter totalled J$306.37Mn were down 26.8% or J$112.21Mn year-over-year. Management attributes the weakness to softer demand in key segments such as Entertainment & Promotions and M-Style Décor. The quarter was also affected by lower client marketing budgets, fewer large-scale productions, and the nonrecurrence of several high-value projects that boosted Q2 2024. However, the company noted that new and returning clients helped cushion the revenue decline.
  • In line with the drop in revenues, direct expenses also declined by 36.2% to J$140.55Mn, contributing to a rise in operating profit to J$12.72Mn, more than double the J$5.82Mn posted in the previous quarter. Still, the improvement was insufficient to offset overall earnings pressures, resulting in the quarterly net loss.
  • Against the background of weaker Q2 results, for the six-month period, revenue declined to J$891.40Mn, down from J$986.33Mn in the same period last year. Gross profit also declined by 9.0% to J$467.49Mn, despite direct expenses falling to $J423.91Mn from $J472.44Mn. However, the gross profit margin improved by 34bps to 52.44% from 52.10%, reflecting tighter project cost controls and enhanced resource planning.
  • Overall, for the first half of the year, MEEG’S net profit amounted to $64.329Mn, a decrease of $55.942Mn or 46.5% from the $120.271Mn earned in the comparative period. This downswing was primarily driven by the reduction in revenue and other operating income, which was not fully offset by cost reductions.
  • MEEG continues to pursue strategic diversification, with increased focus on developing proprietary, revenue-generating events to cushion against project-based volatility. Management expects these initiatives to support earnings in the latter half of FY2025.
  • As at the close of trading on Monday, the stock closed at J$9.97, reflecting a 14.8% year-to-date decline. The Stock currently trades at a P/B of 3.16x, which is below the Junior Market 'Other' average of 2.30x

(Sources: NCBCM Research & MEEG Financial Statements)