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BERLIN — German license trader EM.TV on Thursday blamed the dire economy and continued writeoffs for its E$62.5 million net loss in the first half of the year.

Nevertheless, company, which is expanding beyond its core licensing of children’s programming into sports rights, saw revenue increase 11% to $114 million.

EM.TV “made great progress in its restructuring and strategic reorientation in the second quarter 2003,” company said in its half-year report. “Earnings improved yet still reflect the weak market environment and the high ongoing writeoffs and interest charges.”

Stake sales

It has sold the Jim Henson Co. to the family of founder Jim Henson; sold a 16.4% stake in German producer-distributor Constantin Film to German-Swiss entertainment group Highlight Communications; and divested its minority stake in Formula One racing as part of an out-of-court settlement with the creditors of insolvent media giant Kirch Group.

Company’s operating profits were hampered by writeoffs, including $24 million from expenses related to an outstanding convertible bond and a $13 million writedown on its stake in Munich-based film and TV group Tele Munchen.

Topper Werner Klatten said EM.TV’s most important unfinished tasks remained the restructuring of a repayment plan for the $525 million convertible bond, due in 2005, and the planned acquisition of the remaining 50% stake in the Junior TV children’s programming joint venture, still held by Kirch Media.

EM.TV suffered stratospheric losses from the sales of Henson (which it bought in 2000 for $680 million but sold for $84 million) and Formula One, which the company’s former management pledged to banks in 2001 for some $1.6 billion in loans to Kirch as part of a rescue plan to save EM.TV from bankruptcy.

EM.TV had valued the Formula One stake at $220 million but got a mere $9 million from Kirch creditors earlier this year.

Nevertheless, execs see the divestments as necessary for EM.TV. “The new EM.TV became reality in the first half of 2003,” Klatten said. “We have concluded the group’s restructuring process to a large extent and established a strong second business unit.”

The group has expanded into sports marketing and hopes to build it into a core business. Company acquired nearly 41% of former Kirch sports web DSF and online platform Sport1 as well as all of Kirch’s sports production company Plazamedia.