Vivendi 2010 Profit Rises 4.4%, Aided By ‘Call of Duty’
Vivendi SA posted a 4.4 percent increase in 2010 profit, aided by demand for video-games titles such as “Call of Duty” and “World of Warcraft,” and the company’s operations in Brazil.
The owner of the world’s biggest music and video-game companies said in an e-mailed statement today that adjusted net income, which excludes one-time items, climbed to 2.7 billion euros ($3.72 billion) from 2.59 billion euros a year earlier, in line with analysts’ estimates. Vivendi said it sees a slight increase in profit this year.
“The guidance is nothing to get too excited about,” said Conor O’Shea, an analyst at Kepler Capital Markets in Paris.
Chief Executive Officer Jean-Bernard Levy is looking to take full control of the Canal Plus pay-TV division and SFR, the French mobile-phone unit, by buying out minority partners. The company in January received a $3.8 billion payment for selling its stake in broadcaster NBC Universal from General Electric Co., money Levy has said may be used to buy Vodafone Group Plc’s 44 percent stake in SFR.
“We are maintaining our objective to one day control 100 percent of SFR,” Levy said on a call with reporters, declining to comment specifically on talks with Vodafone. The unit, which posted 1.2 percent sales rise to about 12.6 billion euros, faces a “competitive intensity that’s been strong for years and that’s compounded by a regulatory and tax environment” that’s also difficult, he said.
Vivendi shares fell 1.3 percent to 20.39 euros in Paris.
Dividend, Growth
Vivendi proposed a dividend for 2010 of 1.40 euros a share.
The company, based in Paris, has benefitted from growth in its Activision Blizzard unit, the world’s largest video-game publisher, as well as Brazilian phone operator GVT. Activision sales last year climbed 9.6 percent, while Curitiba-based GVT boosted revenue by 72 percent to about 1 billion euros.
GVT “is a small activity, but it’s not going to be small for much longer at this rate,” said O’Shea.
Vivendi’s SFR and Activision face competitive challenges, with the video game company under pressure to keep existing franchises fresh while delivering new hits.
The SFR unit, Vivendi’s largest, will face a new competitor next year when Iliad SA becomes the fourth French mobile operator. Iliad’s billionaire founder, Xavier Niel, has pledged to drag down French mobile prices, which are higher than those in other European countries according to the Organisation for Economic Co-operation and Development.
Canal Plus
Vivendi and Lagardere SCA are meanwhile preparing an initial public offering of the publisher’s 20 percent stake in Canal Plus France, the country’s largest pay-TV operator. The two companies last year failed to reach a deal that would allow Vivendi to take 100 percent control.
Levy today refused to rule out a last-minute deal that would see Vivendi buying the Lagardere stake before an IPO begins.
“At any moment Lagardere can interrupt the process,” he said. “It’s in their hands.”
Vivendi last month marked a victory in the long-running legal battles left over from the tenure of former CEO Jean-Marie Messier, who nearly bankrupted the company. The company said it will make a “significant reduction” in the 550 million euros it set aside to deal with claims in a New York investor lawsuit after a ruling limiting the size of any award.