German media giant Bertelsmann achieved its "most successful" financial result in 2006, despite a considerable decline in revenue and profit from its recorded music business.

During a press-conference today in Berlin, Bertelsmann chairman and CEO Gunter Thielen stressed that its Sony BMG venture remained a "creative powerhouse," despite the music division standing alone as the corporation's only poor performer.

Bertelsmann and Sony Corp are joint-owners in the Sony BMG recorded music major. The German company's 50% stake in Sony BMG registered revenues of €2.0 billion ($2.6 billion) in 2006, down by 5.2% from the previous year. Operating EBIT declined to €173 million ($229 million), down 2.3% from 2005. Return on sales came in at 8.6%, compared with 8.3% last time.

"The diminished (BMG) result in 2006," explained Bertelsmann, "is attributed solely to the recorded music business."

Bertelsmann's BMG Music Publishing arm generated a "positive performance," the group noted, which offset the margin loss at Sony BMG.

On a positive note, Sony BMG's push into the digital space is showing signs of paying off. The group's digital music formats contributed 12% of revenue, up from 7% in the previous year, Bertelsmann said.

In the years ahead, Sony BMG would rise to marketplace challenges through extending its digital business, and diversifying its collaboration with artists, Thielen explained.

"We plan to actively shape the digital future, worldwide, with our innovative media content and services," he said.

Sony BMG, he explained, might diversify its activities in the merchandising and the live music business.

Overall sales at Bertelsmann reached a record €17.9 billion ($23.7 billion) in 2006, up 7.9% from the previous year.

Operating EBIT rose 16% increase to a new high of €1.867 billion. The group's net income more than doubled to €2.424 billion ($3.2 billion), including the proceeds from the sale of Bertelsmann's music publishing business to Vivendi last September.

BMG Music Publishing, however, remains part of Bertelsmann until final antitrust clearance has been received, the company said. Restructuring and integration costs at BMG were rolled into Bertelsmann's "special items" column, which ballooned to €1.161 billion ($1.5 billion), up from €61 million ($81 million) in 2005.