Bertelsmann reports Q1 losses

Tough U.S. market, weak dollar hurt co.

BERLIN — German media giant Bertelsmann on Wednesday reported a first quarter net loss of d399 million ($453 million) as write-offs, one-off costs, weak consumer demand in the U.S. and the falling value of the dollar took its toll on the world’s fifth largest media company.

Bertelsmann posted a profit of $2.88 billion in the same period last year, fattened by the sale of AOL Europe.

It also saw sales in the first three months of 2003 drop 8.5% to $4.4 billion.

Among its special costs company listed $68 million for the restructuring and integration of Zomba Music, which it acquired last year, into music division BMG.

“The tougher market situation in the U.S., along with the weakness of the U.S. dollar, has made itself felt in Bertelsmann’s quarterly results,” the group said in a statement. “The results are in line with our expectations and reflect the difficult overall economic situation,” added Bertelsmann finance chief Siegfried Luther.

The privately owned group’s main U.S. operations are publishing giant Random House and the BMG music group. European assets include the territory’s largest broadcasting company, RTL Group.

Bertelsmann said it expected the full-year operating profit to be higher than last year’s $1.05 billion. “We still expect to make our targets for 2003 and resolutely strengthen our operating business,” said Luther.

The group is selling its science and trade publishing unit BertelsmannSpringer. Final bids for the division are expected in coming days.

Bertelsmann said in March it was interested in AOL’s book unit and increasing its stake in Spanish TV station Antena 3, but could not make any acquisitions before cutting its debt.

Bertelsmann did not break down its quarterly results into figures for each of its units, which also include magazine publisher Gruner & Jahr.

RTL reportedly also saw a first-quarter slump in sales. RTL’s French unit M6 last week posted a surprise sales hike of 14%, and its U.K.-based production unit Freemantle has cashed in on the worldwide sale of its “Pop Idol” format.

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