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Mediaset falls short of first-half marks

Co. hit by slowdown in ad sales, Kirch writedown

MILAN — Top Italian broadcaster Mediaset posted pre-tax profit below expectations in the first half of the year.

Prexy Fedele Confalonieri presented the results Tuesday, adding that the group has not yet made an offer for Germany’s Kirch Media because the price is still too high.

Hit by a slowdown in advertising sales and the final writedown of its 2.28% stake in Germany’s bankrupt TV group Kirch, Mediaset revealed pre-tax profit of S357.2 million ($347 million) in the first six months of 2002 vs. $437 million in the same period last year.

Operating profit, earnings before interest and tax, fell to $401 million in the first half, down from $485.9 million a year earlier.

Analysts were expecting pre-tax profit of $364 million and an operating profit of $399 million.

Ad sales, which account for 95% of Mediaset revenues (the rest coming from pay TV channels) were down 2.6%.

Group net revenues fell to $1.22 billion from $1.32 billion a year earlier, in line with expectations.

To write off its stake in Kirch, Mediaset took a charge of $30.9 million, after the group had already written down most of its stake in the German group in 2001, to the tune of $180 million.

Group operating costs fell by 4.1% to $487 million, with TV operating costs down by 4.2% to $313 million.

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