Paris - Vivendi SA, Europe’s largest media-to-telecommunications company, cut the full-year forecasts for its two biggest divisions after reporting a decline in revenue for the second quarter.
Earnings before interest, taxes, depreciation and amortisation at mobile-phone division SFR will be 2.8-billion euros this year, instead of 2.9 billion euros predicted earlier, Paris-based Vivendi said today in a statement. Earnings prediction for pay-TV provider Canal Plus was cut to 650-million euros from 670-million euros. Vivendi’s total second-quarter sales dropped 0.5 percent to 5.43-billion euros, while net income rose 7.5 percent to 501-million euros.
Vivendi, trying to refocus its business around media and content, last month announced the $8.2-billion sale of a stake in video-games maker Activision Blizzard. Chairman Jean-Rene Fourtou, making good on a promise to overhaul Vivendi, will use part of the proceeds to cut debt and rebuild the company around Universal Music Group and Canal Plus.
SFR, the French wireless unit, reported an 11 percent drop in sales. As a price war started by Iliad SA goes on for a second year, SFR has started talks with Bouygues SA’s phone unit over sharing part of their mobile-phone networks to cover more ground for less. Shrinking phone bills have also prompted SFR to simplify its structure and cut jobs.
Bouygues yesterday blamed its telecommunications division for a 10 percent decline in second-quarter profit. Orange SA, the largest of France’s four carriers, has forecast it will exceed its target of 600 million euros of savings this year.
Vivendi is also in exclusive talks to sell its stake in Maroc Telecom SA to Emirates Telecommunications and has said it may resume a process to dispose of its Brazilian broadband unit GVT.
Taking into account expected asset disposals including Maroc Telecom and Activision Blizzard, Vivendi’s net debt will drop to 6.5 billion euros from 17.4 billion euros as of June 30, the company said today.
Vivendi’s shares have declined 9.4 percent this year. They were little changed at 15.35 euros on Wednesday in Paris, valuing the company at 20.6-billion euros. - Bloomberg