ProSieben Q1 profits soar 32% on strong sales
EmptyBERLIN -- In another clear sign that Germany is out of its slump, commercial broadcaster ProSiebenSat.1 posted strong sales and revenue growth for the first quarter of 2007.
Revenue at ProSiebenSat.1 jumped 7.7% to €501.2 million ($682 million) in the first three months of the year and net profits soared 32% to €40.6 million ($55 million) on the back of an ever-stronger ad market.
But while these numbers bode well for private equity groups Permira and KKR, which acquired ProSiebenSat.1 in a $4 billion takeover late last year, ProSiebenSat.1 continues to lose market share to local competitor RTL Television.
A string of flops, particularly at Berlin-based channel Sat.1 have cut into the group's audience share. Most recently, Sat.1 pulled "Ugly Betty" after the hit U.S. show bombed with German viewers.
The audience share for the ProSiebenSat.1 group of channels in the key 14-49 demographic shrank from 30.3% to 28.9% in first-quarter 2007. Over the same period, RTL's family of channels -- RTL, Vox, Super RTL and n-TV -- increased market share from 26.2% to 27.3%.
ProSiebenSat.1 CEO Guillaume de Posch said that, despite the first-quarter dip, the group's target was still "at least" a 30% market share in the 14-49 demo.
Permira and KKR plan to merge the German giant, which controls five free-to-air channels, two pay TV channels and a German VOD platform, with SBS Broadcasting later this year, creating Europe's second-largest broadcaster.
Germany's robust advertising market was a rising tide, lifting all boats in the ProSiebenSat.1 group. All of the broadcaster's networks saw strong growth, with revenues at Berlin-based Sat.1 increasing 5.2% to €204.2 million ($278 million), Munich's Pro7 jumping 9.3% to €170.6 million ($232 million), Kabel1 soaring 14.9% to €64.1 million ($87 million) and all-news channel N24 increasing sales by 12.8% to €22.9 million ($31 million).
In total, revenue at ProSiebenSat.1's core free-TV business jumped 5.9% to €438.6 million ($596 million).
9Live, the German game show and shopping channel that is financed through viewer phone calls, boosted sales 5.7% to €27.7 million ($37.7 million)
Other non-traditional activities, including VOD platform Maxdome, pay TV channels Kabel 1 Classics and Sat.1 comedy and Internet business activities, saw first-quarter revenue increase 21.6% to €37.1 million ($50.5 million).
ProSiebenSat.1 CEO Guillaume de Posch forecast a growth of 2%-3% in Germany's overall advertising market this year. ProSieben expects to outpace the market and is forecasting both sales and profit growth for full year 2007.
Shares in ProSiebenSat.1 slipped 1.8% to €17.36 ($23.6) in late day trading Wednesday.