Business
Shares in RTL, which operates 45 TV channels and 32 radio stations in 11 countries, rose as much as 12 percent in Brussels trading. The company is “very convinced” it will post positive net income for the full year, Chief Executive Officer Gerhard Zeiler said on a conference call today.
RTL posted a first-half loss of 105 million euros ($150 million), compared with a profit a year earlier, as advertising clients slashed spending and the company wrote down the value of its businesses in the U.K. and Greece. RTL suffered as the slumping European economy forced consumers and advertising clients to reduce spending. It will slash costs at its core business “significantly” and “gradually” lower its production and acquisition expenses, Zeiler said.
The Luxembourg-based company reiterated that it sees “no significant change” in the European TV advertising market in the second half of 2009 and its profit level will be “considerably down compared to 2008.”
Goodwill Impairments
First-half results were also hurt by goodwill impairments for RTLs Five channel in the U.K. and its Alpha Media business in Greece, RTL said.
RTL shares rose as much as 4.44 euros to 41.91 euros in Brussels today and traded at that level as of 10:02 a.m. Before today, the stock had dropped 12 percent this year.
Excluding restructuring costs and other one-time effects, operating costs dropped by 198 million euros in the first half compared with the year-earlier period. The company said its channels in major markets such as Germany, France, the Netherlands and Belgium all achieved higher audience shares, overcoming cuts in program expenditure. RTL said it will continue to invest in new digital business and the production of content.
“While we work hard to optimize the efficiency of our core business, well also further invest in promising new opportunities − in digital channels, online video, diversification activities and content production,” Zeiler said.
RTL is a unit of Bertelsmann AG, Europes biggest media company and owner of 89.8 percent of the broadcaster.