Vivendi Q3 results highlight continuing woes at SFR

14 Nov 2012

The French media and communications group Vivendi has reported turnover of EUR6.67 billion (USD8.46 billion) for the three months to 30 September 2012, down 1.6% year-on-year. Earnings before interest, tax and amortisation (EBITA) dropped 7.3% to EUR1.39 billion, while adjusted net income fell from EUR685 million in Q3 2011 to EUR665 million in the most recent period. Although Vivendi has raised its full-year profit target on the back of a positive performance at its games business Activision Blizzard, the domestic cellular and broadband internet unit SFR continues to struggle in a highly competitive French telecoms market. Third-quarter revenues at the cellco dropped 8.9% year-on-year to EUR2.75 billion, while EBITA was down 16.6% to EUR537 million. For the full year, SFR now expects a decrease in earnings close to 12%.

In operational terms, SFR added just 40,000 new mobile contract customers in the third quarter, with larger rival France Telecom-Orange managing 320,000 contract additions over the same period. SFR’s post-paid mobile customer base reached 16.454 million at the end of September, up 1.6% year-on-year, while the total mobile user base stood at 20.876 million. SFR says 47% of its subscribers now use a smartphone, compared to 37% a year ago. In the fixed line segment, meanwhile, at the end of September 2012 the company’s active broadband residential subscriber base totalled 5.040 million, with 24,000 net additions in the third quarter.

Vivendi’s other telecoms operations showed a stronger performance. The Maroc Telecom Group, which includes activities in Morocco and a number of sub-Saharan African markets, reported an 18% y-o-y jump in its customer base to almost 33 million subscribers, with a 6.2% increase for the domestic mobile customer base in Morocco. The Brazilian pay-TV and internet operation GVT, meanwhile, saw a 42% jump in lines in service in the year to end-September 2012 to 8.178 million.

France, SFR, Vivendi