Wētā FX posts two years of financial losses

Wednesday, 11 September 2024

Wētā FX’s financial accounts have been revealed for the first time.

Sir Peter Jackson’s digital visual effects and animation company Wētā FX has had a rough two years, posting financial losses in the millions.

The company, which has created visual effects for films like The Hobbit trilogy and Planet of the Apes, made a net loss of $83 million in the year to March.

That followed a net loss of $107m a year earlier.

Wētā, which employs 2000 people and is believed to be film-maker Jackson’s largest business, saw its revenues decline to $430m in the year to March, compared with $437m in 2023.

Wētā accounts show the company could be gearing up for further losses. Notes mention it does not expect to return to profitability for at least two years.

“While the group continues to forecast steady taxable profits from 2026-27, recent industry pressures have meant that projected profits are lower than those forecast in the prior year. While there is still a clear path to utilising previously recognised tax losses in the medium term, the tax losses of [$24.3m] incurred in 2023-24 have not been recognised as deferred tax assets on the balance sheet,” stated notes in its accounts.

This is the first time Wētā’s financial accounts have been made publicly available on the Companies Office website.

Wētā’s financial accounts have only been made public due to a change in company ownership, now that foreign shareholders, including Napster founder Sean Parker, own more than 25% of shares - a threshold requiring financial accounts to be filed to the Companies Office.

Part of Sir Peter Jackson’s entertainment business empire, San Francisco-based Unity Software purchased Wētā Digital, Wētā FX’s software and research and development division, including its engineers, tools and technology, for US$1.6 billion ($2.6b) in 2021.

Its visual effects teams continued under Wētā FX, which is 60% owned by Jackson and his partner Dame Frances Walsh.

But in November last year, Unity terminated its service agreement with Wētā FX, effectively shutting down Wētā Digital, causing 265 redundancies.

At the time, Wētā said the company and Unity had 'mutually agreed' to terminate the service agreement.

Wētā had to pay Unity $170m for a licence following the ending of the agreement.

The New Zealand company said it aimed to hire back as many of the let go staff as possible.