Mediaset First-Quarter Profit Rises 55% on Television Advertising Growth

Mediaset SpA, the television company owned by Italian Prime Minister Silvio Berlusconi, said first- quarter profit surged 55 percent on increasing advertising revenue in Italy and Spain.

Net income jumped to 92.9 million euros ($118 million) from 60 million euros a year earlier, the company said in a stock- exchange statement today. Revenue rose 18 percent to 1.12 billion euros. Analysts had estimated net income of 85.8 million euros on sales of 1.07 billion euros.

“In the first three months of the year, in an economic scenario that remains uncertain, there were the first signs of a recovery in the advertising market,” Mediaset said.

Mediaset, Italy’s largest private broadcaster, runs three free-to-air TV channels that compete with the network of state- owned RAI SpA and Rupert Murdoch’s News Corp.-run satellite broadcaster Sky Italia SpA. Mediaset also controls Gestevision Telecinco SA, Spain’s largest commercial TV station. Last week, Telecinco said first-quarter net income doubled to 58.9 million euros boosted by higher advertising prices.

Gross TV ad sales in Italy gained 5.2 percent to 679.4 million euros in the first quarter. Revenue at the pay-TV unit, which has about 4.25 million active customers, jumped 60 percent to 115.1 million euros.

Ad revenue in the first five months is seen “essentially in line” with the trend in the first three months at more than 5 percent growth, the company said. Mediaset, based in Milan, reiterated a forecast of an increase in net income in 2010.

Pay Television

The company is “confident” June will be in line with a year earlier, Luigi Colombo, managing director of Mediaset’s domestic ad sales unit Publitalia SpA, said on a conference call. This would allow Mediaset to post an increase of 5 percent or more in ad sales in Italy in the first six months, he said.

Mediaset is also expanding in digital-terrestrial broadcasting, where it has a pay-TV offering, called Premium, as well as free channels. Mediaset unveiled today its fourth free channel, La5, targeted at female viewers between 15 and 40 years of age, which will start airing tomorrow. With La5, Mediaset continues its investments in free digital terrestrial, which began in 2004 with Boing, the first free channel for children and families, and continuing in 2007 with Iris, for cinema and cult series.

Mediasat’s pay-TV unit had 4.25 million active customers as of May 7.

“We want to maintain and possibly grow our group audience in the more fragmented context of digital TV,” Content General Director Alessandro Salem said after the presentation. “We plan to launch an all-news and a young-male-audience channel this year and see how viewers and advertisers react. We may then consider new initiatives on thematic networks such as documentaries, fashion and wellness, crime.”

To contact the reporters on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

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