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Assets sale returns Canal Plus to black

Revs up 14% at its core TV biz as co. preps for Vivendi takeover

PARIS — A one-time profit on the sale of some non-core assets helped European pay TV giant Canal Plus return to the black Thursday.

Canal, which is set for takeover by French media conglom Vivendi in the companion deal to the acquisition of Seagram and Universal, posted first-half earnings of 104 million euros ($92 million), compared with a loss of $31.7 million in the same period last year.

The one-time, pretax gain of $180.3 million came on the sale of Canal’s 25% stake in Vox and a 4% stake in Canal Satellite.

The Paris-based company enjoyed a 20% revenue spurt in the past six months to $1.64 billion.

Revenue was up 14% at its core TV business including a 29% jump from properties outside France.

Revenue from production and rights management was up 63% to $175 million, led by Sport Plus’ fast-growing sports rights business, which made $69.6 million this year vs. $8 million in the first half of 1999.

The group said it saw losses related to pay TV businesses outside France, notably Spain and Poland, as well as investments in Internet development. The subsidiary Canal Numedia, launched earlier this year, was also consolidated in the first-half accounts for the first time.

In a separate statement, Canal Plus said former Numedia head Alex Berger, predecessor of incumbent Philippe Bismut, had left the Canal Plus group. Berger switched from the new-media arm earlier this year to become Pierre Lescure’s special adviser on Universal. Neither side was commenting Thursday on Berger’s departure after six years of working closely with Lescure.

With the three-way merger with Vivendi and Seagram imminent, Lescure told a board of directors’ meeting in Paris that it was “the start of a new chapter” in the group’s history.

The pay TV group, which will merge with Universal studios to form the TV and film division of Vivendi Universal, was fully committed to the new organization, Lescure said.

By June 30 this year, Canal Plus’ subscriber base stood at more than 14 million, up 14% compared with the first half of 1999, with 7.3 million subscribers outside France. Some 4.5 million receive the digital service.

Average subscriber revenue had continued to rise, Lescure said, thanks to an array of interactive services on CanalSatellite, ranging from banking to betting. He predicted that gross revenue for 2000 from interactive services would exceed $80.6 million, up 100% over 1999, with the home-betting service handling more than $134,000 worth of bets a day.

(Bloomberg News contributed to this report.)

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