Bertelsmann records $476 million loss
German media giant takes hits across all its divisionsCOLOGNE, Germany -- German media giant Bertelsmann booked a €333 million ($476 million) loss in the first half of 2009, hit hard by the global advertising downturn. Revenue was also down at €7.2 billion ($10.3 billion) against €7.7 billion a year earlier.
Bertelsmann's broadcast division RTL Group, Europe's largest TV and radio operator, was clobbered by the combination of the ad drop, major write-offs on its Brit channel Five and start-up costs for new Greek operation Alpha Media. Revenues at RTL slipped 9.6% to €2.6 billion euros ($3.72 billion) in the first half and profits fell to €296 million ($423 million) from €674 million in H1 2008. But no unit at Bertelsmann escaped unscathed, as book publisher Random House, magazine division Gruner + Jahr, services operation Arvato and direct-to-customer operation Direct Group all took hits.
Bertelsmann execs however said that belt-tightening, introduced across the conglomerate before the worst of the crisis, has cushioned the blow and that second half figures will be significantly improved.
"Our strict cost discipline is beginning to have a significant positive financial impact," said Bertelsmann CEO Hartmut Ostrowski. "The packages of measures that were put together as part of this program are extremely wide ranging and varied and will save us over €900 million ($1.3 billion) this year alone."
Net debt climbed to €6.8 billion ($9.7 billion), a €200 million jump, but Bertelsmann CFO Thomas Rabe insisted Bertelsmann was on safe financial ground.
"Our solid financial management has paid off in the first half: we have good liquidity and adequate credit lines available to us," he said.
Despite the optimistic tone, Bertelsmann is still forecasting a drop in revenues and operating profit for the year.