RTL Group Posts First-Half Loss

LUXEMBOURG: As a result of goodwill impairments at Five in the U.K. and Greece’s Alpha Media Group, RTL Group recorded a 105 million euros loss in the first half of the year, on revenues that were down 9.6 percent to 2.59 billion euros.

The revenue decline was a result of the weakened TV ad market across Europe. The company noted that the ad revenue decrease was offset in part by its content production and diversification businesses. It also cited the beneficial impact of cost-cutting efforts across its operations; in Germany, cost-savings at RTL Television, Vox and N-TV amounted to 97 million euros (-15 percent); in France at M6 48 million euros (-17 percent); in the Netherlands at RTL 4, 5, 7 and 8 17 million euros (-11 percent) and in the U.K. at Five 22 million euros (-13 percent). In addition, RTL Television, RTL 4 and RTL-TVI in Belgium all recorded significant gains in audience share.

The company’s loss, meanwhile, stemmed in large part from the 19 million euros operating loss at Five, where there was also a 22 million euros program write-down and 8 million euros in restructuring charges. There were also restructuring charges at Alpha Media in Greece. 

Announcing the results, Gerhard Zeiler, the CEO of the RTL Group, noted: “During the first half of 2009, the combination of falling advertising demand with the economic downturn on the one hand and an increasing supply of advertising airtime on the other, led to strong pressure on spot prices and discount levels. RTL Group expects no quick change to the TV advertising market conditions and is therefore aiming for a significantly reduced cost base in our core business. In order to adapt to the new market realities, we need to gradually lower our production and acquisition costs, and structure our processes even more efficiently. Our goal is to achieve these savings while maintaining our leading audience market positions. This is very challenging, but achievable. In the first half of 2009, we already managed to significantly reduce costs while simultaneously increasing our audience share in many markets. While we work hard to optimise the efficiency of our core business, we’ll also further invest in promising new opportunities—in digital channels, online video, diversification activities and content production.”