Revenue Down But Profits Soar At RTL Group
First half profits hit near record highs for parent company of “X Factor” producer FremantleMedia.
COLOGNE, Germany – Weak advertising markets in its core European markets held down first half results at broadcasting giant RTL Group, which saw revenues dip 1.3 percent to $3.72 billion (€2.78 billion) in the first six months of this year.
TV advertising revenue in all RTL's core markets -- with the notable exception of its biggest, Germany -- were down.
The group's local divisions outperformed the prevalent market conditions -- the French TV ad market dipped 6 percent in the first half and the Dutch market was down 5.6 percent but operating profits at both Groupe M6 and RTL Nederland were stable. Still, the general decline depressed overall sales.
In what has become a familiar tale for RTL watchers, it was the ever robust German TV market and earnings at RTL's production subsidiary FremantleMedia, producers of X Factor and American Idol, that drove first half results. Operating profits at German division RTL Deutschland were up 9.3 percent to $410 million while FremantleMedia delivered operating profits of $63 million for the first half, from around $50 million a year earlier, with stronger earnings from North America and Asia boosting
the bottom line.
Those results help lift net profits. Operating profits jumped 9.1 percent to $678 million (€552 million), the second-highest first half result in the company's history. Profits attributable to RTL Group shareholders leapt up 52.6 per cent to $560 million (€418 million), a jump also due to a one-of reversal of a 2012 impairment, totaling some $90 million, on RTL Group’s shareholding in the Spanish broadcasting company Atresmedia (formerly Grupo Antena 3).
In the mid-term, RTL faces two major challenges: finding the new blockbuster formats to replace such aging entertainment juggernauts as Idol, Got Talent and Farmer Wants a Wife and expanding its broadcast business beyond the mature markets of Western Europe.
On the second front, RTL is following the global strategy of its parent company, German media giant Bertelsmann, and moving into Asia, recently launching a joint venture with CBS Studios International that will see the two broadcasters launch a pair of jointly branded channels in up to 29 Asian markets.
RTL is also growing its digital presence, recently taking a 51 percent stake in YouTube online network Broadband TV, which manages some 8,500 YouTube channels generating around 800 million video views per month. RTL Nederland also recently took majority control of The Entertainment Group, the largest Dutch pay VOD service.
- Prince Takes Over the 'Arsenio Hall Show,' Debuts New Funky Song
- A Train, a Trestle and 60 Seconds to Escape: How 'Midnight Rider' Victim Sarah Jones Lost Her Life
- 'Divergent' Star Shailene Woodley: The Next Jennifer Lawrence?
- 'Noah' Banned in Several Middle Eastern Countries
- Lindsay Lohan's OWN Series Gets First Official Trailer (Video)
- MOST SHARED
- MOST POPULAR