Vivendi reports slight decline in sales for 2011, but profits are up 9.4%

1 Mar 2012

The French media and communications group Vivendi has reported revenues of EUR28.81 billion (USD40.17 billion) for full year 2011, down 0.2% on the 2010 figure, but up 0.5% on a constant currency basis. Adjusted net income rose 9.4% to EUR2.95 billion due to strong performances of several subsidiaries, including the Brazilian telco Global Village Telecom (GVT), plus the 100% ownership since June 2011 of France’s second largest mobile operator by subscribers, SFR.

SFR’s revenues were EUR12.18 billion for 2011, a 3.1% decrease compared to 2010, adversely impacted by the new VAT rules and termination price cuts imposed by the regulator. Excluding the impact of these regulatory decisions, Vivendi says, revenues would have increased by 1.9%. SFR’s total mobile customer base reached 21.46 million at 31 December 2011, while La Poste Mobile, a mobile virtual network operator (MVNO) 49%-owned by SFR, was successfully launched, with 646,000 customers at year-end 2011. Meanwhile, the active broadband internet residential customer base totalled 5.04 million by end-2011, a 3.2% increase year-on-year. Vivendi is expecting a difficult year for SFR with increased competition following the January 2012 launch of France’s fourth mobile network operator Free Mobile.

The Brazilian telco GVT’s revenues reached EUR1.45 billion in 2011, a 40.5% increase compared to 2010 (up 39.0% at constant currency). Broadband internet service revenues increased by 57.7% and voice service revenues rose by 34.2%. During 2011, GVT expanded its coverage to 22 additional locations and now operates in 119 cities. As a result of the geographical network expansion and its strong commercial performance, GVT’s customer base reached 6.33 million lines in service at end-December, a 49.5% increase year-on-year.

Another Vivendi subsidiary, the Maroc Telecom group, recorded a 12.2% growth in its customer base in 2011, reaching 28.98 million users by year-end, primarily driven by its activities outside of Morocco, where the customer base grew by 39.2% year-on year. This helped Maroc Telecom to limit the decline in its revenues to 3.4% (down 2.5% at constant currency), with sales falling to EUR2.74 billion due in part to a 25% mobile price cut in Morocco and what Vivendi called ‘a particularly unfavourable regulatory and competitive environment’.