Market morass hits pan-European broadcaster
BERLIN — Harsh market conditions continued to batter pan-European broadcaster RTL Group, which posted a 28% drop in operating profit to S197 million ($195 million) in the first half of 2002.
Company nevertheless reported a net profit of $16.8 million; last year, RTL lost $2.3 billion due to a writedown of goodwill after the acquisitions of Pearson Television and Spanish web Antena 3.
With revenue up 5% to $2.1 billion, RTL remains the biggest earner for parent company Bertelsmann.
In view of its lackluster trading on the London Stock Exchange, RTL said it would apply for a delisting. Move, expected in November, would not affect the existing listings at the Luxembourg and Brussels stock exchanges but does reflect growing doubt about the capital markets.
Chief exec Didier Bellens, in a written statement, expressed little hope for an improvement in the market. “Visibility is still extremely low,” he said, “and while there are some small positive signs in the U.K. and the Netherlands, the weak German market and a flat French market do not encourage us to call any sort of recovery at this stage.” In Germany — RTL’s biggest market — gross advertising spending was down 7.2%.
Bellens added, however, that the company’s success in reining in costs will pay off when the market eventually rebounds.
Company said its focus remains on audiences, ratings and cost efficiency, adding that significant progress had been made by Channel 5 in the U.K. The web’s audience share rose to 6.4% from 5.6% and advertising market share was up to 7.3% from 6.1%.
RTL enjoyed format successes with “Pop Idol,” which rolled out in the U.K. on ITV and in the U.S. on Fox (it will air in Germany this fall on RTL Television). In France, RTL Radio increased its market leadership over rivals.
In addition, RTL has streamlined its operational management structure and is seeking to build further synergies within the group.