Vivendi losses surge

14th September 2004, Comments 0 comments

PARIS, Sept 14 (AFP) - French media giant Vivendi Universal on Tuesday reported a surge in its net loss so far this year but forecast a sharp turnaround in its finances for all of 2004.

PARIS, Sept 14 (AFP) - French media giant Vivendi Universal on Tuesday reported a surge in its net loss so far this year but forecast a sharp turnaround in its finances for all of 2004.  

"The restructuring of Vivendi Universal is today practically complete," declared group chief executive Jean-Rene Fourtou.  

He predicted that adjusted net income for all of 2004 would come to more than a billion euros rather than the EUR 700 million previously projected.  

Vivendi Universal earlier reported a second quarter net loss of EUR 1.852 billion (USD 2.3 billion), six times larger than the EUR 313 million shortfall in the same period last year.  

But the group attributed the result to an expected charge of EUR 2.105 billion incurred in the sale of its entertainment unit Vivendi Universal Entertainment to the US television network NBC.  

Operating income in the second quarter rose by 6.6 percent to EUR 888 million from the same period one year earlier.  

For the first six months of the year Vivendi's net loss nearly tripled to reach EUR 1.858 billion from first semester 2003.  

But adjusted net earnings in the first six months came to EUR 467 million, compared with a loss of EUR 14 million in the same period of 2003, the company said.  

The group also predicted that its net debt would fall below five billion euros by the end of this year when taking into account proceeds from the sale of its Veolia Environnement stake. Vivendi will be able to sell its remaining 20.4 percent interest in the company in December.  

Debt stood at EUR 6.4 billion at the end of June, down from EUR 13.7 billion on June 30, 2003.  

Vivendi in addition confirmed that its improving financial strength will allow it to consider a dividend payment in 2005.  

Cash flow from operations is still expected to grow in 2004 on a pro forma basis, while posting a slight year-on-year decline on a reported basis.  

For the first half, Vivendi posted operating income of EUR 1.818 billion, up from EUR 1.677 billion in first half 2003 on revenues that slipped to EUR 11.391 billion from EUR 12.364 billion.  

"Our priority is to improve our activities' operating results by focusing on operational management," said Fourtou, adding that Vivendi's financial position has been "restored" after the the company flirted with bankruptcy just two years ago.  

"Vivendi Universal's strategy is to strengthen its position among the European leaders in media and telecoms," Fourtou said.  

For the Canal Plus Group and Universal Music activities, Fourtou said efforts to improve profitability were on track, adding that a new management team had been appointed for its loss-making video games division.  

Canal Plus group posted a second quarter operating profit of EUR 133 million, up from a pro forma EUR 87 million on sales that fell to 916 million from 974 million.  

Universal Music reported operating profit of 31 million euros in the second quarter, up from a loss of 14 million last year.  

At Vivendi Universal Games, the second quarter operating loss widened to EUR 111 million from EUR 28 million.  

For SFR-Cegetel, operating profits climbed 22 percent to EUR 634 million on revenues that increased 12 percent in the quarter to EUR 2.055 billion.  

This increase was due in part to one-time gains of EUR 38 million, leading the company to warn that the growth posted by the unit in the first half should not be extrapolated over the rest of this year.  

Vivendi Universal shares were down 0.28 percent in early Paris trading at EUR 21.64 in an overall market that was weaker by 0.35 percent at 3,712.38.  

"The first half results were consistent with expectations, with the increased projections for the year already taken into account," a market analyst said.



Subject: French News

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