Mediaset First-Quarter Sales Rises on Advertising Recovery

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Mediaset SpA, the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi, said revenue increased last quarter as advertising sales in Italy showed first signs of recovery in March.

Sales rose 1 percent to 828.8 million euros ($931.7 million), the Milan-based company said in a statement Tuesday. That compared with the 829.5 million-euro average of six analysts’ estimates compiled by Bloomberg. Mediaset posted net income of 0.7 million euros, compared with a 12.5 million-euro loss a year earlier.

In the second quarter, group advertising sales are estimated, across all media, to show a better performance than than in the first, Mediaset said in a statement.

Mediaset, which competes with Rupert Murdoch’s pay-TV provider Sky Italia, is cutting costs while boosting spending on programs to lure customers. As part of its strategy to gain exclusive content, a year ago Mediaset beat Sky Italia by bidding about 700 million euros for the rights to broadcast soccer’s UEFA Champions League for the period from 2015 to 2018.

Mediaset faced questions, on Tuesday’s conference call with analysts, after people familiar with the matter last month said that Vivendi SA may make an investment in Mediaset, possibly also involving Telecom Italia SpA.

“I can rule out a bid for a Telecom Italia stake,” Mediaset’s Chief Financial Officer Marco Giordani said on the call. “We are just open to commercial partnership for our pay-TV unit Premium.” While the company is not a seller of Premium, it is open to a new partner, he said.

Advert Outlook

In the first quarter, television ad sales declined 2 percent in Italy to 935.7 million euros, compared with 954.4 million euros a year earlier, according to a statement by researcher Nielsen NV on Tuesday.

Mediaset ad sales “are in line with estimates but performed more strongly than Italy’s state-owned television competitor RAI,” Sarah Simon, an analyst at Berenberg, said in an interview. Mediaset’s cash position was stronger than expected because of better working capital management, Simon said.

Last month, Berlusconi’s eldest son, Mediaset Deputy Chairman Pier Silvio Berlusconi became chief executive officer, replacing Giuliano Adreani, who has held the position since 2000. Adreani, 72, will remain chairman of Publitalia 80 SpA, the group’s advertising unit.

Mediaset shares fell 0.9 percent to 4.63 euros in Milan before the results, giving the company a market value of 5.47 billion euros.

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