RTL Group sees profit up, revenue down

Pre-tax profit up 22% in third quarter

BERLIN -- RTL Group, Europe's leading television group, has chopped more than $400 million from its expense column so far this year and ratings have held up or increased in most major markets.

But that's cold comfort for the Bertelsmann subsidiary, which Tuesday posted a 5% drop in Q3 revenues to €1.13 billion ($1.7 billion). Revenues for the year to Sept. 30 were off 8.3% at €3.7 billion ($5.6 billion).

The Euro-wide ad slump continues to bite across RTL's portfolio, which includes 46 TV channels in 11 European countries, as well as production giant FremantleMedia, producer of the "Got Talent" and "X Factor" formats.

While RTL can point to cost cuts of €289 million ($433 million) in the first three quarters and reports an uptick in ad sales in September, the situation is still far from sunny.

Despite the problems, however, CEO Gerhard Zeiler said net results were "clearly positive" for Q3 and will be for the full year.

"It would be overly euphoric to say the crisis is over, as visibility remains low for December in most markets in which we are operate," Zeiler told Dow Jones newswire. "However, since September we've recognized an improvement in TV advertising markets compared with the first eight months of the year."

RTL booked a €105 million ($157 million) next loss in the first half of the year but belt-tightening pushed EBITA results up 22.7% to €92 million ($138 million) for Q3.

For the full nine months, EBITA was off 29% at €410 million ($615 million). RTL had €41 million ($61 million) in start-up losses for the period, mainly from Greek TV channel Alpha, which RTL bought last year, and U.K. digital channels Five USA and Fiver.

U.K. broadcaster Five has been a problem child for RTL, but Zeiler said the network would post a "significant operating profit" in the second half of 2009, a sign of a turnaround since ex-ITV exec Dawn Airey took over at Five last October.