Universal Music Group, the market leader of the world's recorded-music industry, had an operating loss of €16 million ($19.6 million) in the first quarter 2004, a 43% improvement over a &#x20AC

Universal Music Group, the market leader of the world's recorded-music industry, had an operating loss of €16 million ($19.6 million) in the first quarter 2004, a 43% improvement over a €28 million ($34.3 million) lost last year, according to financial results released today (May 27) by parent company Vivendi Universal.

Cost reductions explain most of the improved performance, on a general background of continued declines in sales, VU said.

Media giant VU's operating profit rose 10% in the first quarter to €930 million, due primarily to strong performances by its telecom arm SFR Cegetel and its French pay-TV division Canal Plus.

The Paris-based company said it made a net loss of €6 million in the quarter, from a €319 million loss last year. The operating profit -- deemed by most analysts the best indicator of the company's performance -- came in well above analysts' expectations of €893 million.

VU said its debt on March 31 was €11.6 billion. It added that since the completion last month of the sale to newly-formed NBC Universal of 80% of its U.S. entertainment division, the debt today was about €7 billion.

On an adjusted basis, the company said it made a net profit of €239 million against a €56 million net loss in the first quarter of 2003.

Vivendi Universal Entertainment, the company's U.S. movie and TV affiliate, made a €246 million profit, up 15% from the previous year, carried mostly by the good results of its Universal Television Group and improvements at its Universal Parks and Resorts division.

Operating profit at Universal Pictures Group was down 13% on the year, VU said.

Vivendi Universal Games had a €45 million operating loss in the quarter, against a €28 million loss a year ago.


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