(Yicai Global) April 28 -- Revenue at Focus Media Information Technology, a leading Chinese provider of advertising services in buildings and elevators, fell for a fifth quarter in a row, dropping 26 percent in the three months ended March after advertisers tightened their belts in response to the Covid-19 outbreak.

First-quarter operating revenue was CNY1.9 billion (USD268 million), the Shanghai-based company said in an earnings report published yesterday. Net profit plunged 89 percent to CNY37.9 million (USD5.4 million) from a year earlier.

Focus Media attributed the poor performance to the epidemic choking off demand for adverts and holding up the release of commercials in some areas because of epidemic counter measures. The sector was already wobbly when the virus struck, impacted by macroeconomic factors as internet advertisers slashed budgets amid tighter corporate financing, it added.

For the full year, net profit slid 68 percent to CNY1.9 billion on a 16.6 percent drop in operating revenue to CNY12.1 billion.

Focus Media set aside as much as CNY740 million for credit impairment losses last year, up 85 percent from 2018, resulting in a net profit decline significantly higher than that of operating revenue, the report showed. Macroeconomic factors also caused clients to delay payments, resulting in a worsening accounts receivable cycle and growing risks, it added.

Focus Media has been the core ad agency in physical channels in recent years for many emerging internet brands, including Luckin Coffee, whose accounting fraud came to light earlier this month. Luckin Coffee's advertising payments are arriving as normal, Focus Media said on April 3.

Shares of Focus Media [SHE:002027] rebounded today after falling steadily tracking the exposure of Luckin’s scandal. Its stock price rose 2.7 percent today to close at CNY4.63 (62 US cents).

Editors: Dou Shicong, Ben Armour