RTL issues third warning this year

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The Independent Online

RTL, Europe's largest broadcaster, yesterday issued its third warning this year, saying profits would fall as much as 40 per cent as the slump in advertising revenues takes another turn for the worse.

RTL, Europe's largest broadcaster, yesterday issued its third warning this year, saying profits would fall as much as 40 per cent as the slump in advertising revenues takes another turn for the worse.

The company, which owns a majority stake in Channel 5, expects television advertising in Europe to be down by as much as 10 per cent as advertisers slash their budgets.

Didier Bellens, RTL's chief executive, said: "Advertising markets across Europe have continued to deteriorate since our results announcement in September. Based on our forward bookings thus far, we expect that advertising in the first half of 2002 will show continued weakness".

The Luxembourg-based group, which is 67 per cent-owned by the German media giant Bertelsmann , said earning for 2001 would be 35 to 40 per cent below the 555m euros (£339m) it made in 2000. The warning came despite an indication by RTL six weeks ago that advertising was showing some improvement.

Most media companies have been affected by the worst advertising downturn in recent history. RTL's German rival Pro Sieben SAT1 recently said that annual profit would be 45 per cent below 2000's levels and the UK's Granada reported in September a 30 per cent year-on-year fall in profit. Shares in RTL, which said it is increasing its advertising market share despite the downturn, were unchanged at 38p.

RTL said it has been reviewing its business to look for cost savings. It indicated it might close underperforming ventures in Poland to partially offset the expected weak first half next year. It is due to report 2001 full-year results on 2 March 2002.

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