Pay TV costs cut Fininvest profits

Consolidated net income rose 3.6%

Italo Prime Minister Silvio Berlusconi’s Fininvest holding company, which houses his stake in broadcaster Mediaset, publisher Monadori and soccer club AC Milan, has posted a sharp drop in profits.

In a statement Tuesday, Fininvest said investments in pay TV services were behind the 19.5% drop in first-half net profit to E161 million ($212.3 million). Consolidated net income rose 3.6% to $4.29 billion.

However, earnings before interest and tax also fell — down 7.9% compared with last year’s results, although those were boosted by one-off gains. On a like-for-like basis, the fall this year was 4.6%, Fininvest said.

Berlusconi’s daughter and Fininvest president Marina Berlusconi said the company had “worked hard to limit the impact of the financial crisis,” and had also sought to ensure its continued growth.

She said that “investments, linked principally to international development and film/TV production” were up 63% in the period to $1.58 billion.

Meanwhile, it emerged on Wednesday that Fininvest has agreed to cover losses linked to the credit crunch suffered by clients of the Milan-based Mediolanum financial services company, in which it has a stake.

The other large Mediolanum stakeholder, Ennio Doris, has made a similar commitment.

The losses come because of index-linked policies associated with failed banking house Lehman Brothers, reportedly worth $274 million.