Past Still Hovers Over Vivendi

Vivendi continues to deliver strong trading figures but the past still hovers above the company.

Former chief exec Jean-Marie Messier is due to stand trial for misleading investors and the 2009 year-end results show a euro 550 million ($751 million) provision for a class-action lawsuit it lost in the US in January.

Both cases date back to the early ’90s when Messier nearly bankrupt the company, borrowing huge sums of money as he tried to convert the former French water utility into one of the world’s biggest media giants.

Current chairman Jean-Bernard Levy says Vivendi will continue to vigorously defend itself against “unfounded claims” that the company is struggling, although the legal actions relate to matters that occurred some time before he took the helm.

Levy says he has a “strong hope” that the US court decision will be overturned on appeal and there will be nothing to pay, but setting aside the provision led to a euro 731 million ($998 million) pre-tax loss in the fourth quarter.

On the trading front Universal reported a 6.9 percent rise in full-year revenues to euro 27.1 billion, but the legal provision caused pre-tax profits to fall 41.9 percent to euro 2.76 billion ($3.76 billion).

Levy says Vivendi is cautious on the outlook for 2010, forecasting a “slight growth” in operating profits.

“We are being reasonably conservative on our predictions,” he said. “There is still a lot of uncertainty on the economy and consumer demand remains a question mark in some countries.”

Revenues in the video games business Activision Blizzard – which owns the “World of Warcraft” franchise – rose 45.3 percent to euro 3 billion ($4.1 billion) but Universal Music – the world’s biggest record company – saw revenues fall 6.2 percent to euro 4.36 billion ($5.94 billion).