French telecommunications and entertainment conglomerate Vivendi Universal reported a narrower loss for the first half of the year and its chairman said he hopes to complete the planned sale of its U.S. entertainment assets to General Electric Co.’s NBC division in the second half of next year.
Vivendi reported Wednesday it lost €632 million ($723 million) in the January-June period in contrast to a loss of €12.31 billion in the first half of 2002.
The company has been selling assets to trim its staggering debt.
Vivendi’s operating profit dropped 27 percent in the first half to €1.68 billion ($1.92 billion) compared with €2.29 billion in the same period of 2002.
The results were still better than analysts’ expectations, partly due to the slimming down of Vivendi’s operations since the first half of 2002.
Vivendi is currently in the process of selling Vivendi Universal Entertainment – its U.S. entertainment assets – to NBC to trim a multibillion dollar debt run up under former chairman Jean-Marie Messier.
Those assets include Universal Pictures, three cable channels, a television studio and several theme parks.
Current chairman Jean-Rene Fourtou said Wednesday he hopes the merger of those operations with NBC will be completed in the second half of 2004. Once that takes place, Vivendi’s revenue in the media sector would be about €9 billion ($10.3 billion) a year, down from the current €15 billion, Fourtou said.
Disposals over the past year have helped reduce Vivendi’s net debt to €13.7 billion ($15.68 billion) at the end of June 2003, from about €35 billion a year earlier.
Vivendi expects its net debt to be about €13 billion ($14.88 billion) at the end of 2003, excluding the expected merger of its U.S. media assets with NBC.
Vivendi’s better-than-expected operating profit in the first half was attributed mainly to its telecommunications divisions, Cegetel-SFR and Maroc Telecom, and to its television and cinema units, VUE and Canal Plus Group.
Cegetel-SFR’s first-half operating profit rose 32 percent to €984 million ($1.13 billion). Maroc Telecom, in which Vivendi has a 35 percent stake, saw operating profit jump 39 percent to €283 million ($324 million).
Vivendi Universal Entertainment, which comprises most of Vivendi’s U.S. assets and was hit by the decline in the U.S. dollar exchange rate against the euro, posted a 6 percent drop in operating profit to €495 million ($567 million).
