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RTL First Quarter Profits Slip, North America Weighs On FremantleMedia

European broadcasting giant RTL has reported a downturn in profit for the first three months of 2018, as has its FremantleMedia production and distribution arm, which blamed a weaker performance at its North America division.

American Idol” producer FremantleMedia, which is searching for a new CEO ahead of Cecile Frot-Coutaz’s departure for YouTube, posted revenue of €271 million ($319 million), flat year-on-year. EBIDTA profit was down 13% at €13 million across the same period. Looking ahead, RTL said the current quarter is likely to be flat for FremantleMedia with an uptick in the second half of the year as new dramas roll out.

RTL owns some of Europe’s largest commercial broadcasters including RTL in Germany and M6 in France. Almost half of company revenue comes from advertising and it said it does not anticipate significant ad growth in the current quarter. It reported revenue of €1.4 billion for the three months to end-March, a 0.8% increase on the same period last year. EBIDTA profit was down 1.9% at  €259 million.

“The first quarter is not necessarily an indicator for the full year – in particular in years with major sporting events such as the upcoming football World Cup,” CEO Bert Habets said. “Thus, we will keep a close eye on seasonal swings in advertising spend and expect 2018 to be more back end loaded than the prior years.”

The company is pinning some of its hopes for growth on on-demand services. Habets said it will ramp up its VOD businesses having already launched new services in Belgium, Croatia, and Hungary this year.

“We will increase investments in our video-on-demand services with a clear focus on local, exclusive content, and gradually adopt a hybrid model – combining a free, advertising-financed service with a premium pay product,” he said.

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