Half-year earnings up by $735 million
BERLIN — Gaining substantially from the ad market rebound, German media giant Bertelsmann was back in the black after achieving a dramatic boost in net earnings and a record half-year operating profit.The privately owned group saw its bottom line increase by more than half a billion euros after net profit climbed to E246 million ($312 million) from a net loss of $423 million in the same period a year ago. Fueling growth were the conglom’s ad-driven divisions, RTL Group and magazine publisher Gruner + Jahr, as well as Random House, “where the U.S. business and digital activities have shown particularly positive development,” the company reported on Tuesday. Random House saw U.S. sales of e-books soar 300% in the first six months of the year, with similar surges in Germany and the U.K. Bertelsmann’s revenue (adjusted for the sale of RTL’s British TV channel Five) climbed more than 4% to $9.4 billion from January to June. The upturn in Europe’s ad markets coupled with long-term cost-cutting measures introduced last year resulted in a record operating profit for the group, up 52% to $958.4 million. As a result, Bertelsmann, which is celebrating its 175th anniversary this year, raised its outlook for the full year. It now expects a profit of more than $635 million. “I am very pleased that business is going so remarkably well in the year of our 175th anniversary,” said Bertelsmann chairman and CEO Hartmut Ostrowski. “The economy and especially the advertising markets are friendlier. We now are profiting from having expanded our market-leading positions, while also having lastingly improved our cost structures.” Ostrowski added that Bertelsmann was “well equipped for the future” and would continue to develop many different businesses. “The entire field of digitization will play an increasingly important role.” Bertelsmann’s chief financial officer Thomas Rabe added, however, that “visibility for the important fourth quarter still remains low in the advertising markets.”
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