Vivendi reports revenue gains: justifies telecoms focus

16 May 2003

Paris-based media and telecoms conglomerate Vivendi Universal [NYSE: V] posted strong performances by its principal telephony businesses – Cegetel and Maroc Telecom – in the three months to 31 March 2003, and said that the results justify its latest strategy to refocus on telecommunications. Cegetel, France’s second largest telco in which Vivendi holds a 70% stake, said revenues rose by 4% to EUR1.78 billion (USD2.04 billion), while its mobile arm SFR reported 164,000 net subscriber additions in the quarter to help boost its market share by one percentage point to 35.3%. At the end of the period in review SFR had 13.7 million subscribers of whom 54.2% were post-paid customers – up from 50.1% a year ago. Elsewhere, Vivendi’s 35%-owned Moroccan PTO Maroc Telecom reported a 6% increase in Q1 turnover to EUR374 million, aided by a 20% rise in its mobile subscriber base to 4,725,000; fixed lines in service, however, remained flat at 1.116 million.

Vivendi chairman Jean-Rene Fourtou has plans to transform the ailing media giant into a leaner, fitter telecoms company by disposing of many of its non-core assets. However, whilst Vivendi Universal Entertainment – its theme parks, studios and cinemas division – performed solidly, increasing quarterly revenues by 6% year-on-year to EUR1.45 billion, some of the group’s other operations did not fare so well. US-based Universal Music Group saw turnover decline sharply by 19% to EUR1.1 billion, while both its US and French film divisions suffered from a lack of major film releases in early 2003. Meanwhile, Vivendi Games posted sales of EUR124 million, down 15% on the previous year, despite having three major-league titles – Spyro IV, Crash V and Warcraft III – in its stable. Vivendi is keen to offload the music business but the latest poor performance threatens to scupper its chances of securing a good price.