Vivendi Profits Cover Universal’s Tumble

Entertainment and telecom giant Vivendi’s first quarter figures show steady growth, despite Universal Music Group’s earnings tumbling nearly one-third to $65.8 million.

The Paris-based company, which also owns assets including French pay-TV firm Canal+ and telecoms operator SFR, says total revenues were up 3.8 percent year-on-year to $10.7 billion and earnings before interest, tax and amortisation rose 7.2 percent to $2.43 billion. Net income is up 29 percent to $1.36 billion.

Universal’s revenues dropped less than 1 percent to $1.26 billion, a 5 percent fall at constant currency, but the favourable currency rates and strong growth from its merchandising business couldn’t offset a 2.7 percent decline in recorded music sales.

The drop has been blamed on fewer new releases during Q1 and falling demand for physical product. Digital sales were up 17.6 percent.

Changes in sales mix and restructuring charges associated with the reorganization plan announced last year offset any savings on operating costs.

Earnings before interest, tax and amortisation came out 32.4 percent lower than the first quarter of 2010 at $65.76 million.

The best sellers for the world’s biggest music company included Rihanna and Justin Bieber. Upcoming releases will feature new titles from Lady Gaga, Kanye West and Mumford & Sons.

Vivendi’s big winners were its games division Activision Blizzard, where revenues rose 10.8 percent to $1.5 billion. EBITA was up 31.3 percent to $714 million.

The success was driven by such game franchises as “Call of Duty” and “World of Warcraft.”

The “Call of Duty: Black Ops First Strike” package shattered Xbox LIVE launch records, surpassing 1.4 million downloads within 24 hours of release.

Brazilian phone operator GVT, in which Vivendi has had the majority shareholding since 2009, saw revenues rise 38.6 percent to $468 million. The performance was largely fueled by an 85 percent increase in broadband service revenues and a 52.8 percent increase in its customer base, which now stands at 4.765 million lines in service.

GVT’s earnings before interest, tax and amortisation rose 89.3 percent to $128 million.

Canal+Group, Vivendi’s subscription TV business and historically its biggest earner, saw revenues rise 4.1 percent to $1.62 billion.
EBITA was $377 million compared with the $327 million it made in the first quarter of last year.