Vivendi posts below par results

Games and Canal Plus record upbeat performance

PARIS — Vivendi on Wednesday posted slightly below par fourth-quarter revenues of E5.55 billion ($7.19 billion), up a modest 1.2%.

The upbeat results of its videogame division, behind international hit “World of Warcraft,” and French paybox Canal Plus, on a positive streak after gobbling up rival TPS, were undercut by the lackluster performances of cash cow telco SFR and Universal Music Group, which like other music companies is struggling with piracy and falling CD sales.

Vivendi’s annual revenues stood at $25.9 billion, up 2.9%.

On the French bourse, Vivendi’s share price fell by as much as $1.22 to $40.84 during trading Wednesday.

Fourth-quarter revenues at Canal Plus Group rose 4.9% to $1.19 billion. Full-year revenues are up 7.7% to $4.71 billion. New pay TV subscriptions were their best ever in December, Vivendi said. Full-year subs reached 5.14 million, a net gain of 76,000. The annual churn rate was 12%, one of the lowest in Europe.

At Universal Music Group, fourth-quarter revenues dipped 1.5% to $2.15 billion. Full-year revenues stand at $6.43 billion, up 1.3%. Vivendi blamed the fourth-quarter dip on adverse currency fluctuations.

U.S. sales were down, but sales in Europe were “very strong” in the quarter, the company said, helping UMG boost its market share in the U.K., the Netherlands and Spain, where UMG acquired Spanish record company Vale Music.

Digital revenues reached $619 million, up 84% from the previous year, and repping 9.6% of total revenues.

Vivendi Games delivered the most impressive hike, with revenues up 33.1% to $423 million on the back of its international hit “World of Warcraft.” Some 8 million people around the world have played the multiplayer online game, available in six languages, Vivendi said.

However, SFR, which boasts 17.8 million customers and is Vivendi’s single biggest earning division, reported a fourth-quarter decline of 1.4% in revenues to $2.83 billion. Full-year revenues were $11.3 billion, down 0.1%.

Vivendi blamed the decline on cuts in regulated tariffs and increased competition.

The group’s Moroccan telco Maroc Telecom fared rather better, with fourth-quarter revs up 4% to $648 billion. Full-year revenues were up 10.4% to $2.66 billion.

Separately, senior Canal Plus exec Olivier Courson is poised to take operational responsibility for Studio Canal and step down as Canal Plus Group’s general counsel.

He was appointed Studio Canal’s president in 2005, but he has spent most of his time thrashing out Canal Plus’ pay TV merger with TPS, which was made official in January.

Courson steered the group’s negotiations with the French film industry and antitrust authorities, which imposed 56 conditions on Canal Plus when it OK’d the merger late last year.

Courson will turn his attentions to developing Studio Canal in France and internationally, with managing director Frederic Sichler as his No. 2.

Studio Canal also recently parted company with Stephane Celerier, head of theatrical distribution. Timing of the move perplexed some, as Studio Canal’s theatrical arm Mars Distribution has been doing quite well. Company was third after Gaumont Columbia and 20th Century Fox in 2006, thanks to pics including Oscar-nominated “Days of Glory” and romantic comedy “I Do.”

Mars was renamed Studio Canal Distribution and is run by Philippe Desandre, formerly of Warner Bros. France. The unit will distribute 26 films this year, including David Lynch’s “Inland Empire.”

Publishing its 2006 revenues on Wednesday, Canal Plus Group said that despite its strong French performance, Studio Canal, a 100%-owned subsidiary, made lower revenues than in 2005, but did not give figures. Canal Plus said the dip was mostly due to decreased income from its deal with Working Title.

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