Mediaset 2014 Sales Stall Amid Reviving Italian TV Ad MarketDaniele Lepido
Mediaset SpA, the broadcaster controlled by former Prime Minister Silvio Berlusconi, failed to snap a three-year decline in revenue even as Italy’s television advertising market showed signs of reviving in the final months of 2014.
Sales last year were 3.41 billion euros ($3.73 billion), a slight decline from a year earlier, the Milan-based company said Tuesday. Analysts had projected 3.42 billion euros, the average of estimates compiled by Bloomberg. Net income rose to 23.7 million euros from 8.9 million euros.
Chief Financial Officer Marco Giordani in February forecast a return to growth in Mediaset’s TV ad revenue this year and Luigi Colombo, managing director of the company’s advertising unit, reiterated that forecast on Tuesday.
“In Italy, the trend in the advertising market at the beginning of 2015 confirmed the progressive improvement of the previous quarters,” the company said in a statement.
Sales for the industry fell 0.5 percent in Italy in 2014 to 3.51 billion euros, according to researcher Nielsen NV.
Mediaset proposed a dividend of 2 cents a share. The stock rose 0.1 percent to 4.39 euros at 9:09 a.m. in Milan. It has risen 28 percent this year, giving the company a market value of 5.2 billion euros.
“The announcement of a return to dividend is a proxy of confidence in the trends management are seeing,” Ian Whittaker, an analyst for Liberum Capital, said in an interview.
Mediaset, which competes with Rupert Murdoch’s pay-TV provider Sky Italia, is cutting costs while boosting program spending to lure customers to its offering, dubbed Premium. As part of its strategy to gain exclusive content, Mediaset a year ago beat out Sky Italia by bidding about 700 million euros for the rights to broadcast soccer’s UEFA Champions League for the 2015-2018 period.
“Mediaset is looking for a partner for its pay-TV unit Premium, but we are not a seller, we are not interested in giving up the control of this unit,” Giordani said Tuesday on a conference call with analysts.
Last month, Mediaset’s EI Towers SpA offered 1.23 billion euros in cash and stock for rival RAI Way SpA to create a single large operator of broadcasting towers in Italy.
Mediaset shares have gained 27 percent this year for a market value of 5.18 billion euros. Berlusconi last month raised about $430 million paring his stake in the company to strengthen the finances of the family’s investment company.