Mediaset posts 31% profit drop

Third quarter results underscore Italian ad weakness

MILAN — Mediaset, the broadcaster controlled by outgoing Italian prime minister Silvio Berlusconi, posted a 31% drop in nine-month operating profit Tuesday as the media mogul-turned-pol promised to resign from government.

The third-quarter results were in line with analyst predictions — but underscored that advertising continues to be weak in Italy and Spain, where Mediaset owns Telecinco and Cuatro.

Earnings before interest and tax dropped to €368.2 million ($502 million) from $740 million during the first nine months of 2010.

Nine-month revenues were fractionally lower at $4.2 billion as ad sales on Mediaset’s Italian free-to-air channels fell 2.9%.

Net profit stood at $230.5 million in line with forecasts.

Mediaset’s shares fell 2.9% on Tuesday, as Berlusconi lost his majority in parliament and later said he would step down.

Mediaset repeated a forecast of lower 2011 net income.

“Italy and Spain continue to be among the most exposed economic areas and there is therefore little prospect of a significant change in the trend in the advertising market compared with the first nine months,” it said in the statement.

Deutsche Bank analyst Alessandro Bai-Badino told Variety the results measured up to market expectations. “But they show that advertising pressures and costs are the key issues facing the company,” he said.

Another issue is the upcoming loss of Berlusconi’s pervasive political influence over Italy’s media landscape.

Meanwhile, chief financial officer Marco Giordani confirmed during a conference call that Mediaset will bid for control of Dutch TV production giant Endemol, which it now owns a third of, pitting it against Time Warner, which has made a non-binding $1.4 billion offer for the heavily indebted company.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety

Loading