Sharp annual disparity due to new accounting method
COLOGNE — German media giant Bertelsmann was back in the black in the first quarter with a net profit of E31 million ($37.7 million) and it’s on course for improved operating results for the full year.
Company recorded revenue of $4.6 billion, down from $4.76 billion a year earlier, although the group said sales actually increased 3% after allowing for currency fluctuations and last year’s sale of its scientific publisher BertelsmannSpringer.
The privately owned group suffered a net loss of $485 million loss in the first quarter last year, but the sharp disparity was due largely to the adoption of a new accounting standard under which amortization of goodwill, or writeoffs, no longer applies. The changes, along with an improved operating result this year as well as an extra $18 million from “special items,” boosted earnings. Last year’s first-quarter profit was also hit by a $68 million writeoff from restructuring and integration costs of Zomba Music.
Bertelsmann’s earnings before interest and tax reached $135 million, up from a $91 million loss in the period last year.
The world’s fifth-largest media group owns publishing giant Random House and the BMG music group in the U.S.; in Europe, assets include the territory’s largest broadcasting company, RTL Group.
Company has continued its restrained investment policy, part of a strategy of consolidation highlighted at the presentation of annual results in March. In the first quarter, investments were $283 million, slightly less than the $301 million spent last year.
Chief financial officer Siegfried Luther said in a statement, “We confirm our forecast of a continued improvement in operating results for the full fiscal year.”