Vivendi Up Despite Universal
Vivendi’s 2007 earnings were up 16 percent despite its music business interests being hit by the continued drop in CD sales and a sliding dollar.
Profit excluding one-time gains and some costs, which Vivendi calls adjusted net income, was up to euro 585 million (US$888 million) from euro 505 million, largely on the back of subscriber gains at its Moroccan telephone company and lower costs at the Canal Plus pay-television unit.
Vivendi owns 53 percent of Maroc Telecom, which is expanding throughout Africa and buying other phone companies. The region has been the world’s fastest-growing wireless market for the last five years and Maroc’s fourth-quarter operating profit rose 8.6 percent to euro 240 million.
Universal Music reported illegal downloading and a weakened dollar behind a 7.1 percent drop in profits to euro 289 million, much worse than the 4.5 percent analysts estimated. It’s expected to report a "slight" gain in earnings before interest, tax and amortization.
The recorded music market shrank 10 percent to about $17.6 billion in 2007, the eighth straight drop and the biggest since sales peaked in 1999. The figures suggest Universal still isn’t hurting as much as some of its rivals.
Vivendi plans to become less reliant on CD sales. Two months ago it started an Internet service called zaOza that offers unlimited downloads of games, videos and music for mobile phones and computers for a monthly subscription fee of about 5 euros.
The company said it expects growth in its subscriber portfolios in 2008 and a profit rise similar to last year’s based on its current businesses.