Germany's Bertelsmann Reports Record First-Half Operating Profit
BERLIN – German media giant Bertelsmann on Friday reported its highest profit from operations for a first half of the year in its long history, with operating profit jumping $50 million to $1.02 billion.
The company also posted net profit of $557 million, the highest figure in more than a decade.
It was Bertelsmann's "old media" enterprises, particularly the company's broadcast division RTL Group and its publishing arm Random House, that were responsible for the bulk of the growth.
The only shadow over the company's first-half report, released Friday, was revenue, which sank by almost 2 percent to $9.9 billion, a reflection, Bertelsmann says, of the weak economies in several of its key European territories and "several structurally declining businesses."
Bertelsmann CEO Thomas Rabe has kicked off a major strategic restructuring at the German group, investing heavily in digital operations and moving to expand in higher-growth territories in Asia and South America.
Bertelsmann's recent buyout of music rights group BMG as well as the merger of Random House with U.K. publisher Penguin - to create "the first truly global book publisher" in Rabe's words - have both been framed in terms of the new strategy. As has RTL Group's new joint venture with CBS Corp. to launch two branded entertainment channels in Asia.
Earlier this year, Bertelsmann raised some $1.9 billion in new capital for its expansion plans by selling off a minority stake in RTL, which operates free and pay-TV channels across Europe and controls TV production juggernaut FremantleMedia, which produces American Idol and X Factor.