UPDATE: Vivendi Confirms 2011 Targets Despite Economic Troubles
31 August 2011 - 5:34PM
Dow Jones News
French telecom-to-entertainment group Vivendi SA (VIV.FR)
Wednesday confirmed its full-year guidance as strong second-quarter
growth at its video games and Brazilian telecoms units continued to
offset weakness in the company's French telecoms business.
"Despite the turbulent economic and financial environment, our
operational indicators are increasing. We confirm our full year
outlook for adjusted net income above EUR3 billion, and for an
increase in the dividend," Chief Executive Jean-Bernard Levy said
in a statement.
The CEO urged caution amid heightened concerns over the global
economy but said that so far he has seen no signs of a slowdown in
business. Still, the company will not decide on the level of its
dividend increase until the end of the year, the CEO added.
Vivendi said net profit rose 23% to EUR824 million in the second
quarter while adjusted profit rose 12% to EUR884 million, driven by
the settlement of a legal dispute in Poland as well as a tax
advantage linked to Vivendi acquiring full control of telecoms
group SFR.
Adjusted earnings before interest and taxes, a closely watched
figure that excludes non-recurring items, rose 0.3% to EUR1.66
billion in the quarter, beating analysts' forecast, as a surge in
profit at video-games maker Activision Blizzard Inc. (ATVI) and
Brazilian telecoms unit GVT offset weakness at SFR and Maroc
Telecom (IAM.CL), in which Vivendi owns a majority stake.
Revenue rose 0.2% to EUR7.07 billion, in line with analysts'
forecasts.
Vivendi earlier this year acquired the 44% stake SFR it didn't
already own from Vodafone Group PLC (VOD) for EUR7.95 billion.
However, SFR is struggling amid heightened competition in the
French telecoms market ahead of the launch of Iliad SA's (ILD.FR)
Free brand. SFR's adjusted EBIT dropped 8% in the second
quarter.
Levy declined to comment on recent press reports that the group
may be interested in acquiring all or part of Polish broadcaster
TVN SA. "We never comment on any particular rumor," Levy said, but
added that the company is "very attentive" to what is happening in
Poland as it already has operations there.
The CEO also said Vivendi has had no contact with Lagardere SCA
(MMB.FR) over the past few quarters regarding its stake in French
pay TV company Canal Plus France. Vivendi has long been interested
in buying the 20% it doesn't already own in the company but
Lagardere was planning to launch an initial public offering for the
stake, before it postponed the plans in the spring amid worsening
market conditions.
Vivendi shares closed Tuesday at EUR16.18.
-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54;
ruth.bender@dowjones.com
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