Vivendi Universal on target for merger and first full-year profit
Vivendi Universal hopes to seal the $40bn (£24bn) merger of its entertainment assets with US TV network NBC within the next few weeks, it said yesterday as it reported reduced half-year losses.
The indebted French-American group made a loss of 632m (£437m) in the first six months of the year. Vivendi lost 12.3bn in the same period last year, when it was forced to write off billions from the value of its assets after a huge acquisition spree pushed it close to collapse.
In the last six months the company's Canal Plus pay-TV business moved out of the red, while its telecoms business, Cegetel experienced strong growth.
Although its music and games operations both made a loss, Vivendi said it expected to make a profit before financial charges for the full year - the first time it will have done so since the business was created through the merger of Vivendi and Universal three years ago.
Although the top-line loss was bigger than some investors had hoped, a 20% rise in first-half operating profits to just under 1.7bn was better than expected.
Chief executive Jean-Renι Fourtou took over last year from the disgraced Jean-Marie Messier, who orchestrated Vivendi's ill-starred expansion. Yesterday Mr Fourtou forecast that full-year operating profits would be up more than 20% on 2002.
The group is putting the finishing touches to the merger of Vivendi Universal Entertainment with NBC, owned by General Electric.
The VUE assets include the Universal film, theme park and TV production businesses. Mr Fourtou said the deal, which will leave the group with a 20% stake in the combined entity, should be signed in a few weeks.
It will reduce Vivendi's debts to under 5bn by the end of next year - compared with 13.7bn in June - by which time Mr Fourtou intends to start looking for growth and making acquisitions again. He said the group might even pay shareholders a dividend from 2005. Mr Fourtou also hinted that he would not leave at the end of 2004, as originally planned.
Analysts are unsure whether the company will survive that long. Vodafone is seen as a potential bidder for what remains of Vivendi, as it looks to gain control of French mobile phone company SFR.
Yesterday's figures went some way towards vindicating Mr Fourtou's action last year in seeing off a challenge from Vodafone and increasing Vivendi's holding in Cegetel, which has a controlling stake in SFR, to 70%.
SFR reported a 32% rise in operating income for the first half to 984m.
However, Mr Fourtou did not rule out the possibility of doing a deal with Vodafone.
The indebted French-American group made a loss of 632m (£437m) in the first six months of the year. Vivendi lost 12.3bn in the same period last year, when it was forced to write off billions from the value of its assets after a huge acquisition spree pushed it close to collapse.
In the last six months the company's Canal Plus pay-TV business moved out of the red, while its telecoms business, Cegetel experienced strong growth.
Although its music and games operations both made a loss, Vivendi said it expected to make a profit before financial charges for the full year - the first time it will have done so since the business was created through the merger of Vivendi and Universal three years ago.
Although the top-line loss was bigger than some investors had hoped, a 20% rise in first-half operating profits to just under 1.7bn was better than expected.
Chief executive Jean-Renι Fourtou took over last year from the disgraced Jean-Marie Messier, who orchestrated Vivendi's ill-starred expansion. Yesterday Mr Fourtou forecast that full-year operating profits would be up more than 20% on 2002.
The group is putting the finishing touches to the merger of Vivendi Universal Entertainment with NBC, owned by General Electric.
The VUE assets include the Universal film, theme park and TV production businesses. Mr Fourtou said the deal, which will leave the group with a 20% stake in the combined entity, should be signed in a few weeks.
It will reduce Vivendi's debts to under 5bn by the end of next year - compared with 13.7bn in June - by which time Mr Fourtou intends to start looking for growth and making acquisitions again. He said the group might even pay shareholders a dividend from 2005. Mr Fourtou also hinted that he would not leave at the end of 2004, as originally planned.
Analysts are unsure whether the company will survive that long. Vodafone is seen as a potential bidder for what remains of Vivendi, as it looks to gain control of French mobile phone company SFR.
Yesterday's figures went some way towards vindicating Mr Fourtou's action last year in seeing off a challenge from Vodafone and increasing Vivendi's holding in Cegetel, which has a controlling stake in SFR, to 70%.
SFR reported a 32% rise in operating income for the first half to 984m.
However, Mr Fourtou did not rule out the possibility of doing a deal with Vodafone.
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