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Viv U Entertainment revenues off 15%

Currency fluctuations, asset sales affect earnings

PARIS — Revenues at Vivendi Universal’s up-for-sale Vivendi Universal Entertainment division fell 15% to 1.5 billion euros ($1.7 billion) in the second quarter, with particular weaknesses in its TV production business.

Companywide, Vivendi U got slammed by currency fluctuations and asset sales, reporting a 60% falloff in revs vs. a year ago to $6.89 billion, slightly below analysts’ expectations.

Universal Music took another painful hit amid a marketwide slowdown, with revs down 29% to $1.2 billion, due in part to fewer international releases in the quarter.

The group figures take into account currency fluctuations and Vivendi U’s asset sales, including Vivendi Universal Publishing and Houghton Mifflin, which caused revs to shrink 58% vs. the first term to $13.9 billion.

Vivendi Universal is hoping to sell VUE for $14 billion, a price judged too high by MGM, which pulled out of the race this week after offering $11.5 billion. This poor financial showing could hinder company’s attempts to get top dollar for its entertainment assets.

In Thursday’s figures, Vivendi U’s media interests on the other side of the Atlantic also saw a second-quarter dip in revenues, with sales at the Canal Plus Group pay TV unit dropping 8% to $1.2 billion.

Vivendi U’s telecom interests were the sole bright spot, with revs at Gallic telco Cegetel/SFR rising 6% to $2 billion.

Despite negative impact of a weak dollar, Vivendi U is maintaining its target of a strong rise in operating income, with an increase of more than 39% for continuing operations and improved pro-forma operating cash flow.

Debt was reduced during the quarter to $15.27 billion, down 50% from a year ago. Company will report its bottom-line earnings Sept. 25.

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