Universal Doubles Q1 Profits
Universal Music Group almost doubled its profit despite flat revenues, largely thanks to selling more of its own product – as opposed to distributing other people’s.
Other contributing factors include a 33 percent increase in digital sales and the positive impact of the downward valuation of remuneration schemes linked to equity value.
UMG, the world’s biggest music company, reported first-quarter revenues of euro 1.03 million, 0.6 percent up on last year, but earnings before tax and interest (EBIT) have rocketed 94.7 percent to euro 111 million.
Bestsellers in the period were releases from Jack Johnson, Janet Jackson and new Welsh artist Duffy, while Amy Winehouse’s 2006 album Back to Black sold an additional 2.2 million copies to take her total sales above the 8 million mark.
The 2007 purchases of Germany’s BMG Publishing and the U.K.’s Sanctuary Music Group have also started to show a positive sales impact.
However, EBIT was impacted by the euro 12 million restructuring costs needed to integrate the companies into the UMG fold.
Vivendi, Universal’s Paris-based parent company, said its Q1 pre-tax and pre-interest earnings dropped 5.6 percent to euro 1.2 billion, just more than the analysts’ aggregated forecast of euro 1.13 billion.