MUMBAI: DQ Entertainment?s consolidated net profit for the fiscal second quarter slipped 53 per cent to Rs 141.84 million from Rs 217.25 million in the same quarter year ago on foreign exchange loss of Rs 79.8 million.

The company, which had registered a gain of Rs 27.2 million for the corresponding quarter in the previous year, said the foreign exchange loss of Rs 79.8 million includes an unrealised loss of Rs 74.2 million.

"These losses have arisen on restatement of the foreign currency balances of receivables and payables at the exchange rate as on the closing date. This unrealised loss will be reversed in subsequent quarters," DQE said.

For the six months period ended 30 September, the impact on account of foreign exchange loss is Rs 5.63 million.

The liquidity squeeze in the global markets has also impacted the company resulting in delays in recoveries of receivables, it said. The company has made significant efforts to reduce the receivables position and is confident of reducing the overall receivables position by the end of the financial year.

DQE posted revenue of Rs 643 million during the quarter compared to Rs 629 million in the year ago period representing a change of 2.17 per cent. The company?s expenditure jumped 12.61 per cent to Rs 427.81 million from Rs 373.25 million.

The company?s revenue from animation saw a 4 per cent dip to Rs 420.93 million from Rs 437.40 million in the same quarter of the preceding fiscal. Revenue from distribution increased 14 per cent to Rs 222.48 million from 192.36 million.

As of now only one home-grown IP, The Jungle Book TV Series Season 1 has been launched on a global scale and the story of its success is evident from the increasing revenue numbers achieved from licensing & distribution. With productions of other own IPs namely Peter Pan, Lassie and Robin Hood in process; the company is confident of achieving its targeted growth in the years to come.

The company said it has invested significantly over the last three years in the distribution business and as of 30 September, the net investments in the distribution business stands at approximately Rs 4.25 billion.

The company expects FY13 to be the year of peak investments in the distribution business. With most of the properties expected to be delivered over the next 18-24 months, it expects this business to deliver significant net cash flows from FY14 onwards.

DQE said the pre-production of the Jungle Book feature film is in full swing with all the international talent on board. All the expenses are being capitalised resulting in increase of intangible assets by Rs 257 million.

DQE CMD & CEO Tapaas Chakravarti said, "We have made substantial progress in licensing and distribution of our intellectual properties and gone from strength to strength with conclusion of several deals with leading networks and licensees globally. The promotional deal for ?The Jungle Book? with Burger King Worldwide is a feather in the cap along with broadcast deals for our properties such as Robin Hood, Iron Man, Casper, Jungle Book and others with leading networks such as ABC Australia, De Agostini Italy, ATV Turkey.

"The company?s production pipeline is steady and we have successfully completed deliveries of several TV series such as Casper Season 2, Little Prince Season 2 and Mickey Mouse Club House Season 4. Our foray into theatrical production with 3D Jungle Book Movie has taken wings with several top rated Hollywood talents on board and we are gathering momentum to conclude distribution deals in various territories. We remain confident that the global entertainment industry has excellent long term growth prospects, while our business remains well placed for projected growth in the current year."

DQE had concluded agreements worth $6 million including two new co-production agreements and five licensing & distribution deals. The said revenue is expected to be generated over the next two years.