PARIS: France’s Vivendi Universal, on the mend after more than a year of turmoil, has forecast a return to profit after its losses narrowed in the first half, and said its near-term future remained in media and telecoms.
Vivendi, home to Universal Studios and Universal Music, also said that it was on track to ink a merger of its US entertainment business with General Electric’s NBC in a few weeks and close the deal in the second quarter 2004.
Chief executive Jean-Rene Fourtou, brought in last year to lead Vivendi back from the edge of bankruptcy, said the company’s debts had been slashed by more than half and it expected to have positive cash flow in 2004, with money to pay a dividend.
“We are a construction site in recovery – a site making good progress, but a construction site nonetheless,” Fourtou told a news conference.
Vivendi’s net loss narrowed to 632 million euros (US$727mil) in the first half from 12.31 billion euros a year ago, while its operating profit rose a pro forma 20% to 1.67 billion euros.
The company said its pay-TV unit had swung to a profit and its telecoms subsidiary had posted strong gains, setting the group on track for a net profit before amortisation and other charges in 2003.
However, its music and games units both fell into the red.
Company debt fell to 13.7 billion euros from a staggering 35 billion a year ago, and Vivendi said it expected its debt to fall to less than 5 billion euros at the end of 2004, assuming completion of the NBC deal.
Fourtou indicated that after the sale of its US entertainment unit, Vivendi would concentrate on running its telecoms units, Cegetel and Maroc Telecom, and a stable of media assets including Universal Music Group, pay-TV station Canal Plus and Vivendi Universal Games.
“Not only do I intend to keep all these businesses but you will see that from 2005 we...will have little debt, good cash flow and, therefore, from then on we will be investors in these businesses,” he said. – Reuters