RTL posts H1 net loss of $150 mil

Europe's largest broadcaster foresees full-year profits down

BERLIN -- Double-digit ad drops across Europe floored leading broadcaster RTL Group, with revenue down nearly 10% to €2.6 billion ($3.7 billion) in the first half and net losses of €105 million ($150 million) attributable to RTL shareholders.

RTL chopped about €200 million ($285.4 million) from its expense column in the last six months, putting pressure on program suppliers and tightening up in-house operations.

But it wasn't enough.

RTL will pull the budget belt even tighter said company CEO boss Gerhard Zeiler.

"We need to gradually lower our production and acquisitions budget" Zeiler said, with the goal of "a significantly reduced cost base in our core business in order to adjust to new market realities."

One of those new realities is the increasing disconnect between ratings and revenue. Despite its budget cuts, RTL actually increased market share in many territories, but that didn't translate into more ad bookings.

As TV spots disappear, RTL now faces the twin problem of less cash for programming and more air time to fill.

This has led to "stronger pressure on spot pricing and discounting levels," Zeiler acknowledged.

It's pressure that is unlikely to go away soon. Zeiler sees no sign of a recovery in the European TV market this year and RTL is forecasting full-year profits to be "considerably down" on 2008.