Universal Music Earnings Dip In First Nine Months

Universal Music Earnings Dip In First Nine Months

Universal Music Group posted a 2.5% decline in earnings before interest taxes and amortization in the first nine months of 2012 compared with a year ago, according to results posted by its French conglomerate parent Vivendi on Tuesday.

The world's largest music company posted EBITA of €238 million (about $302 million) while revenue rose by 2.1% to €2.9 billion ($3.68 billion) thanks in part to an 8.6% increase in digital sales and higher license income which helped offset falling demand for physical products like CDs.

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However, on a constant currency basis, Universal Music's EBITA fell 5% and revenue also fell by 3.4%

Recorded music best-sellers year-to-date include releases from Justin Bieber, Maroon 5 and Nicki Minaj, as well as Lana Del Rey and Carly Rae Jepsen.

The nine-month period to Sept. 30 does not include the acquisition of EMI Recorded Music which closed on Sept. 28.

Vivendi reaffirmed its stated objective to make £100 million ($158.7 million) of annual synergies for Universal Music post acquisition.

Following the recent acquisition of EMI Recorded Music, UMG said Tuesday: "The sale process of certain EMI recorded music assets is underway, and these divestments are generating robust interest. Team integration is also progressing according to plan."

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The French entertainment and telecom conglomerate Vivendi posted adjusted net income of $845 million (665 million euro), down 2.9 percent from the year-ago period. Earnings before interest, taxes and amortization (EBITA) fell 7.3 percent to $1.77 billion (1.39 billion euros).

EBITA rose at video game maker Activision Blizzard and French pay TV firm Canal+, but fell sharply at Universal Music Group. It also dropped at all telecom assets except for a Brazilian operator.

Vivendi's revenue declined 1.6 percent to $8.48 billion (6.67 billion euros) as Activision Blizzard and Canal+ posted a gain, Universal Music Group recorded a gain that turned into a drop when assuming constant currency rates, and telecom results fell except for a Brazilian operator.

The group also increased its full-year forecast for adjusted profit.

Canal+ revenue was up for the first nine months of 2012, while EBITA was down slightly amid an increase in value-added tax. Financials from Canal+ foreign and non-pay TV activities grew, "notably thanks to solid performances of StudioCanal and the pay TV operations in Vietnam," Vivendi said.

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