Vivendi Posts Rise in Adjusted Earnings -- Update

By Ruth Bender 

PARIS-- Vivendi SA on Tuesday reported a rise in first-quarter adjusted earnings, but said net profit fell sharply without the income from telecommunications assets it has sold off as the French conglomerate continues to transform itself into a pure-play media company.

Vivendi--which in recent years has substantially slimmed down from a telecommunications to broadcasting conglomerate to a company with activities mainly in pay TV and music recording--said net profit slipped to EUR33 million ($37 million), compared with EUR431 million a year earlier, when the company was still profiting from companies it had agreed to sell, such as French telecommunications firm SFR.

Vivendi has in recent years sold an array of assets from telecoms to videogames, and is now seeking to rebuild itself into a large European media company under the tight leadership of chairman and largest individual shareholder, Vincent Bolloré.

As Vivendi is waiting to receive the final checks from its asset sales, all eyes have been on Mr. Bolloré, and how he plans to use the company's cash pile to build a European media group.

"We aren't closing doors on any potential opportunities for the new Vivendi," Chief Executive Arnaud de Puyfontaine said on a conference call. "We are working on many different scenarios."

Mr. Bolloré in recent weeks tightened his grip on the company as he increased his stake to 14.5% from 5%, and secured double voting rights, a move that will give him even more leeway in steering the future of Vivendi.

Vivendi on Tuesday said it made a buyout offer for Société d'Edition de Canal Plus, a unit of its pay-TV group Canal Plus Vivendi already indirectly controls with a 48.5% stake. The group is offering EUR7.6 a share after a dividend payment of EUR0.25 per share.

The deal is the second acquisition under Mr. Bolloré's leadership. The group last month entered exclusive talks with Orange SA to buy its video-streaming site Dailymotion. Mr. de Puyfontaine said on a conference call that he expects to seal a deal in the coming weeks.

Excluding the impact of the disposed assets, the group's adjusted earnings before interest and taxes rose 18% on the year to EUR218 million.

Sales at the group rose 7.6% to EUR2.49 billion, also excluding disposed assets.

The group's Universal Music Group posted sales that were up 11% to EUR1.1 billion from a year earlier, largely on the strength of the dollar, but with online streaming revenue outpacing declines in physical sales and digital downloads.

French pay-TV group Canal Plus increased revenue by 4.0% to EUR1.37 billion, with rising subscriber numbers primarily in Africa and Vietnam, the company said.

Mr. de Puyfontaine said that there was no reason for Vivendi to change its guidance. The group in February said it expected slight growth in revenue for 2015 and its adjusted net profit to rise by 10% because of lower restructuring and interest costs.

Write to Ruth Bender at [e-mail]

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