PARIS — Vivendi, the French entertainment-to-telecommunications conglomerate, said Tuesday that it beat its full-year earnings target, helped by sales of video games and a smaller-than-expected drop in profit at its French mobile unit SFR, which has been hammered by a price war.
Vivendi posted full-year adjusted net income of €2.86 billion, or $3.78 billion, before one-time financial events, exceeding its target of €2.7 billion. Revenue rose 0.6 percent to €28.99 billion, compared with the average estimate of €28.51 billion in a Thomson Reuters I/B/E/S poll of analysts.
SFR saw full-year earnings before interest, tax, depreciation and amortization, or Ebitda, fall 10.6 percent, before one-time charges, to €3.3 billion, better than the group’s target for a drop of close to 12 percent.
The company’s Activision Blizzard video game maker posted increases of 9.8 percent in revenue to €3.77 billion and 13.6 percent in Ebitda to €1.15 billion last year as it launched new games like Black Ops II.
The division is not expected to match last year’s performance in 2013, however, because of a “challenged global economy” and a smaller number of game releases, Vivendi said, adding that the Ebitda target was still above $1 billion.
Vivendi’s chief financial officer, Philippe Capron said Vivendi was not in a hurry to push through asset sales. Vivendi’s financial position meant it was not forced to make a “fire sale,” he told analysts Tuesday.
“We are not under pressure in our disposals processes,” Mr. Capron said in a conference call. “If the prices are not good, we will take our time.”
Vivendi is looking to sell assets including its 53 percent stake in Maroc Telecom and GVT, a Brazilian telecommunications and television subsidiary, as part of an overhaul to cut debt and reduce its exposure to the capital-intensive telecommunications business.
Les Échos newspaper said Tuesday that Vivendi had failed to obtain offers near its preferred price of €7 billion for GVT and was delaying the sale.
Shares in Vivendi, whose businesses range from video games, music and pay-TV to telecommunications, have lost about two-fifths of their value in the last five years. The company is penalized by a conglomerate discount, meaning investors undervalue its intrinsic value because of the range of subsidiaries. Vivendi has said it wants to shake this off to improve its valuation.
“If disposals disappoint, investor focus will switch back to weak earnings momentum and the limited credit rating headroom,” UBS analysts wrote in a note.
Article source: http://www.nytimes.com/2013/02/27/technology/vivendi-beats-full-year-earnings-target.html?partner=rss&emc=rss
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