Vivendi reports first half fall, but music scores well

French media and telecoms group Vivendi revealed an 11.2-percent slump in net profit in the first half of 2013 and revised down the outlook for some of its core businesses. The group was set back notably by problems in its telecom unit SFR, but Universal Music performed well. Chief executive Jean-Francois Dubos said that activities across all divisions were in line with expectations for the whole year. The net profit figure for the first six months of the year was 1.03 billion euros ($1.37 billion). The Universal Music division raised sales and stood by its targets, and the group said that it was well on its way to more than halving net debt. At Citi Bank, analysts said that the results were "decent". In mid-morning trading, shares in the group were showing a gain of 0.98 percent to 15.50 euros. The overall French market as measured by the CAC 40 index was up 0.27 percent. The group owns internet service provider and mobile phone operator SFR which, along with other mobile phone companies in France was hard hit last year by the arrival of cut-price operator free. Against a background of changes and alliances in the European mobile-phone business, SFR reported that sales fell by 11.3 percent by comparison with the performance in the first half of last year to 5.1 billion euros. SFR cut its outlook for operating profit this year to 2.8 billion euros from 2.9 million euros expected previously. Vivendi's group financial director Philippe Capron told a telephone press conference that this was the result of a new tax. Sales by the pay-television channel Canal+ rose by 5.3 percent to 2.6 billion euros owing to the integration of new, non-pay television services in France, and also in Poland. But the market for advertising had turned out worse than expected and Canal+ revised down slightly its forecast for earnings before interest, tax, depreciation and amortisation (Ebitda) this year to about 650 million euros from 670 million euros previously. The Brazilian subsidiary GVT increased sales by 14.7 percent to 884 million euros but downgraded part of its annual outlook, saying that sales would grow by 15 percent rather than 20 percent. However, it said that its Ebitda figure, previously set at 40 percent would now be more than 40 percent. But a pillar of the group, Universal Music, which had increased sales by 16.3 percent to 2.2 billion euros stood by its targets for the year. Group sales amounted to 10.8 billion euros to show a fall of 1.5 percent from the equivalent figure last year. But operating profit slumped by 27.0 percent to 1.4 billion euros. These figures excluded performances by Activision Blizzard and Maroc Telecom which are the subject of asset sales, Vivendi said. The group said that these two operations, together with the disposal of Parlaphone, should reduce net debt to 6.5 billion euros from 17.4 billion euros at the end of June this year and 13.4 billion euros at the end of 2012.