Vivendi: Revenue Up, Profit Down
Universal Music Group’s parent company announced revenues marginally up for Q4 but the bottom line took a serious knock, largely due to exceptional items.
Vivendi says income for rose from $37.5 billion to $37.7 billion but profits were clobbered by a $995 million payment to Liberty Media Corp and other exceptional costs relating to telecom firm SFR and the Canal+ Group.
In January Vivendi announced that a New York court confirmed it would have to pay euro 765 to settle a lawsuit filed by Liberty Media, which rose out of the Paris-based company’s 2002 purchase of Liberty’s stake in USA Holdings.
Vivendi was found to have misled Liberty about a liquidity problem at the company, and artificially inflated the value of its shares, which in turn affected the buy.
The upshot is that Q4 profits fell nearly 18 percent to $463 million, while profits for the full year dropped nearly 14 percent to $3.32 billion.
Universal Music Group revenues rose 8.3 percent to $5.9 billion, although much of that growth was due to the acquisition of EMI’s recorded music business, plus the growth in recorded music sales in North America and favorable currency movements.
Many analysts reckon Universal got a good deal when Warner Music Group paid $762 million for Parlophone, particularly as the best offer from the under bidders was believed to be in the region of $550 million.