RTL scores revenue jump
Write-downs on U.K. biz impact Euro groupBERLIN -- European broadcast giant RTL Group scored its seventh-straight jump in revenue and operating profit last year, but massive writedowns on its U.K. television business cut into net profits.
Sales at RTL were up 1.2% to 5.77 billion euros ($7.35 billion) last year, with reported operating profit (EBITA) up 2% to 916 million euros.
But goodwill write-offs totalling 337 million euros ($430 million) on its U.K. television operations -- where RTL-owned channel Five is going through painful restructuring -- slashed net profits.
Earnings dropped to 296 million euros ($377 million) compared with 674 million euros in 2007.
RTL chief executive Gerhard Zeiler said the group has a "broad-based, secure set-up" but acknowledged tough times are ahead.
"We are experiencing a substantial slowdown in advertising bookings," Zeiler said. "We will respond to this by focusing on our core business and by reviewing all costs and structures. This will result in a significantly lower cost base in all our operations."
At Five, this sort of streamlining will mean major job cuts. Five boss Dawn Airey has said the channel might chop nearly a quarter of its staff to keep expenses down (HR 3/5).
The belt-tightening will not, however, extend to RTL shareholders. RTL Thursday proposed paying a dividend of 3.5 euros ($4.45) a share to its investors.
Zeiler declined to give an earnings forecast for the coming year, saying the "current state of advertising markets and the very short-term (advertising) booking cycle" made predictions impossible. But he did say he expects RTL's profits to be down compared with 2008.