BERLIN — Germany’s ProSiebenSat.1 posted an unexpectedly strong $155 million net profit in the fourth quarter of 2009, giving the German web full-year earnings of $198 million, despite falling revenues, thanks to a rigid cost-cutting program.
The figures were far better than a year earlier, when the web lost $192 million in the fourth quarter and lost $163 million in 2008. But the web said it won’t be paying any dividend to major shareholders KKR and Permira despite getting back into the black.
Despite a 6% drop in advertising revenues to $3.8 billion last year, ProSiebenSat.1 managed to record a 3.3% rise in EBITA to $953 million.
ProSiebenSat.1 has been hit hard by the advertising downturn and is saddled with enormous debt. The web reduced its staff by 9% last year to just under 5,000.
“Thanks to sustained cost management and a strong performance in the fourth quarter we were able to bring the company back into the profit zone,” said ProSiebenSat.1 topper Thomas Ebeling.
The web was able to cut expenditures by some $299 million — twice as much as originally planned — in part by using more re-runs. It was also helped by the fact that the overall advertising market did not shrink as badly as feared. It dropped by 10% last year, rather than the worst case scenario, 15%.
Ebeling was cautious about the outlook for next year. “The overall conditions have improved somewhat,” he said. But he added it was hard to see how the year would unfold. The web, he added, would in any event continue working hard to cut costs.
The group is saddled with debt of $5 billion, which it took on in 2007 to buy SBS Broadcasting, creating a pan-European broadcasting group to rival RTL.