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Cinram loss shrinks as DVD copying revenue rises

07/08/08

TORONTO (Reuters) - Cinram International Income Fund , the world's biggest provider of prerecorded media products, posted a smaller quarterly loss on Thursday as revenue rose because the company copied more DVDs.

Cinram, which replicates CDs, DVDs and distributes video games, said its net loss was $7.1 million, or 12 cents a unit in the second quarter. That was better than the loss of $26.6 million, or 45 cents a unit, in the same period a year earlier.

Cinram won a DVD replication and distribution deal with Universal Pictures in Europe during the quarter, which helped it increase sales, it said.

Total revenue rose to $412.8 million from $345.1 million, Cinram said.

The company said it replicated 246 million DVDs in the quarter, up 18 percent from 209 million a year earlier.

CD segment revenue rose to $54 million from $49.6 million a year earlier as the company changed its product mix. CD sales are down as more people turn to digital -- and sometimes illegal -- downloads of music.

Video game revenue shot to $28.9 million from $9.5 million, reflecting "strong organic growth" and the inclusion of a full quarter's worth of business from Ditan, a distribution firm acquired by Cinram in April 2007.

Cinram reported its results after markets closed. During the day, its units fell 3 Canadian cents to close at C$3.99 on the Toronto Stock Exchange. A year ago, the units were worth

C$23.40.

($1=$1.05 Canadian)

(Reporting by Wojtek Dabrowski; editing by Peter Galloway)

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