Vivendi Universal today (Sept. 14) reported a sharply wider half-year net loss of €1.86 billion ($2.28 billion) from €632 million ($774 million) last year, hit by currency translation lo
Vivendi Universal today (Sept. 14) reported a sharply wider half-year net loss of €1.86 billion ($2.28 billion) from €632 million ($774 million) last year, hit by currency translation losses linked to its entertainment deal with NBC.
France's largest media group, which has undergone a deep restructuring to bring debt under control, also pledged to deliver an adjusted net profit for the full year of "above €1 billion" ($1.22 billion) which it said was an upgrade of its previous guidance.
However, the company had not given precise 2004 targets in the past, saying in March only that it expected adjusted net income would "grow very strongly."
Vivendi said last month that following approval by the French authorities it would be able to accelerate the use of its past net losses by applying a Consolidated Global Profits tax system which it estimates will save it €3.8 billion ($4.6 billion) in tax over the next 6-7 years.
The company said the larger deficit was principally due to dollar-euro foreign exchange translation losses of €2.105 billion ($2.57 billion) on the partial sale of its VUE entertainments division to NBC, the media arm of General Electric.
The half-year loss compared with a forecast loss of €1.58 billion ($1.93 billion). However, most analysts were focused on the operating profit.
Vivendi reported an 8.4% rise in operating profits for the six months to June, to €1.82 billion ($2.22 billion), slightly above forecasts of €1.78 billion ($2.18 billion). "Today the reorganization of Vivendi Universal is almost complete," said Jean-Rene Fourtou, chairman and chief executive. "Its financial position is restored."
Vivendi was plunged into a financial crisis in early 2002 following a costly acquisition spree led by former chairman/CEO Jean-Marie Messier.
Messier was ousted in July 2002 and Fourtou was brought in to shore up Vivendi's balance sheet, which he has done by shedding publishing, entertainment and utility businesses.
The group repeated its commitment to bring net debt below €5 billion ($6.12 billion) by the end of the year from €11.6 billion ($14.2 billion) at the end of 2003. It also confirmed it would pay a dividend for the full year.