Vivendi trims outlook after weak H1 results

French media group Vivendi reported a fall in first-half results due to weakness at its telecom activities in its home market. Revenues fell 1.5 percent to EUR 10.842 billion, as growth at Universal Music and GVT in Brasil could not offset weaker results at SFR. EBITA dropped 27.0 percent from a year earlier to EUR 1.391 billion, after SFR saw its operating profit fall by EUR 407 million due to increased competition and price pressure in the French mobile market. 

Net profit fell less, down by 11.2 percent to EUR 1.035 billion, thanks to lower taxes and higher earnings from Maroc Telecom in Africa and Activision, which are up for sale. The company had net debt of EUR 17.4 billion at the end of June, up from EUR 13.4 billion six months earlier, but expects this to fall to around EUR 6.5 billion once it completes the divestments of Maroc Telecom, 85 percent of Activision Blizzard and the record label Parlophone. 

Vivendi maintained its full-year outlook for an increase in EBITA at Universal Music Group, but lowered the outlooks for Canal Plus, SFR and GVT. Due to the confirmed telecom tax in France, SFR now expects EBITDA around EUR 2.8 billion this year, down from a forecast of around EUR 2.9 billion previously. GVT's revenue growth outlook was cut to the mid teens from the low 20s, due to the slowdown in the Brazilian economy, while the weaker ad market reduced Canal Plus's annual EBITA target to EUR 650 million from EUR 670 million.