UPDATE:Mediaset 9-Months Net -48%, 09 Profit Seen Markedly Down
(adds details, background, CFO comments)
By Giada Zampano
OF DOW JONES NEWSWIRES
ROME -(Dow Jones)- Mediaset SpA (MS.MI), Italy's largest private broadcaster,
said Tuesday its nine-months net profit fell 48.2% from a year earlier, as
advertising spending continued to fall in its key Italian and Spanish markets,
with first signs of improvement foreseen only in the last months of the year.
Mediaset, owned by the family of Italian Prime Minister Silvio Berlusconi,
forecasted a marked decline in net profit and operating results for the full-
year, despite a slight improvement of the economic scenario seen in the short
term and a continued effort to cut TV costs.
Many European media groups have already cut their 2009 outlook, forecasting a
year of lower profits and further cost-cutting as the advertising slowdown
continues.
Earlier Tuesday, RTL Groupe SA (RTL.BT), Europe's largest pan-European
broadcaster by households posted a 22.7% increase in third-quarter operating
profit as cost cutting took effect.
Italy's largest commercial broadcaster faces tough competition in its home
market from News Corp.'s (NWS) satellite unit Sky Italia and is struggling to
defend its dominant position in the free-to-air TV market following the slowdown
in advertising spending.
News Corp. owns Dow Jones, publisher of this newswire.
The Italian broadcaster's nine-month net profit fell to EUR184.2 million from
EUR355.8 million a year earlier, beating the EUR170 million average analysts'
estimate.
Mediaset said that in the first ten months of the year Italy's advertising
revenue fell 10.2%, with the advertising trend expected to improve in the last
two months of 2009.
Its Spanish unit, Gestevision Telecinco SA (TL5.MC) said last week its nine-
month net profit fell 73% as audience share declined and the country's
advertising market contracted.
Mediaset launched its Pay-TV package, Mediaset Premium, in 2007, at a time of
increasing competitive challenges in its core Italian market from satellite-TV
rival Sky Italia and confirmed Tuesday it expects it to break even in 2010.
"The results we've got in the pay-TV business as of now reinforced our belief
that we'll reach the breakeven in 2010," chief financial officer Marco Giordani
said in a conference call with analysts.
Mediaset said pay-TV revenue grew 41% to EUR379.9 million in the nine months,
with active cards totaling 2.9 million at end-September, despite more than 2
million cards expired at the end of June.
Mediaset started its pay-TV business by offering prepaid cards, which usually
expire after three months and are rechargeable. The company is now trying to
convert its card holders into long-term subscribers, offering a low-cost package
with a dozen channels.
Analysts believe the Italian broadcaster may be able to win a considerable
stake of the fast-growing Italian pay-TV sector, betting on its inexpensive mix
of programs, movies and soccer matches.
The group's CFO said the recently announced entrance of rival News Corp. in
the Italian digital terrestrial market with the launch of a new free-to-air
channel is "no big news" for Mediaset.
Giordani also said the group is able to afford possible acquisitions "in the
EUR1 billion area," without having financing problems, but added the company
doesn't have any specific deal on the table right now.
Spanish media group Promotora de Informaciones SA (PRS.MC) has recently
confirmed it held talks with Mediaset, but not about a merger or asset sale.
Company Web site: www.mediaset.it
-By Giada Zampano, Dow Jones Newswires; +39 06 69766925; giada.zampano@
dowjones.com
(END) Dow Jones Newswires
11-10-091423ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|