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Vivendi Reports Lower Second-Quarter Earnings, Revenue

Canal Plus - H 2011
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The French conglomerate, which owns Universal Music, a majority stake in Activision Blizzard, Canal+ and telecom assets, is reviewing possible asset sales.

LONDON - French entertainment and telecom conglomerate Vivendi on Thursday reported lower second-quarter financials.

The company posted adjusted net income of 706 million euros ($886 million), down 20.1 percent from the year-ago period. Earnings before interest, taxes and amortization (EBITA) fell 20.6 percent to 1.32 billion euros ($1.66 billion).

EBITA declined at video game maker Activision Blizzard, rose at French pay TV firm Canal+ and dropped at all telecom assets except for a Brazilian operator. Universal Music Group reported higher EBITA, but assuming constant currency rates, that turned to a slight decline.

Revenue declined 1.5 percent to 6.97 billion euros ($8.73 billion) as Canal+ posted a gain, Universal Music Group recorded a decline, telecom results fell except for a Brazilian operator, and Activision Blizzard posted growth, which turned to a decrease when using constant currency rates.

The group reiterated its full-year forecast for adjusted profit. Driven by challenges in its French telecom business, Vivendi's earnings excluding specials items could drop as much as 15 percent from a record 2.95 billion euros in 2011 to more than 2.5 billion euros this year and will also decline in 2013, the company had said earlier this year. As a result, it cut its dividend

"All our businesses are focused on developing solid commercial performances and on continuously adapting their cost base," said CEO Jean-Francois Dubos. "We remain totally committed to recreating shareholder value, growing adjusted net income per share and keeping a strong credit rating. With this in mind, we will continue to work…on Vivendi’s strategic development."

The French conglomerate owns Universal Music Group, a majority stake in Activision Blizzard, Canal+ and telecom assets, but it recently said it would review its asset portfolio with an eye on possible divestitures. Jean-Bernard Levy, who departed as CEO earlier this summer, had opposed any asset sales.

"We will communicate on the group’s necessary evolution as and when appropriate," Dubos said Thursday, signaling his team was in no rush.
 

Email: Georg.Szalai@thr.com

Twitter: @georgszalai