Mediaset 2015 Profit Misses Estimates on Tax-Related Costsby
Annual revenue of 3.52 billion euros meets analysts' views
Company reports `stable' ad growth in first two months of 2016
Mediaset SpA, the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi, reported full-year profit that missed estimates because of a tax-related issue the company’s statement didn’t detail.
Net income in 2015 totaled 4 million euros ($4.5 million), down from 23.7 million euros a year earlier, the Milan-based company said Tuesday in a statement. Analysts projected profit of 19.9 million euros, the average of 16 estimates compiled by Bloomberg. Sales rose 3.2 percent to 3.52 billion euros, in line with analysts’ estimates, as TV advertising sales grew.
“Ad sales in first two months of 2016 are in line with growth of previous quarters in the context of stable demand,” the company said in the statement. Mediaset Premium subscribers may rise in the second half thanks to Soccer’s Champions League exclusive content, the company said.
Without the tax item, profit would have been 28.9 million euros, Mediaset said. The company, founded almost 40 years ago, is at a crossroads as it contends with upstarts like Netflix Inc., which offers a global, online television service. Chief Executive Officer Pier Silvio Berlusconi and Vivendi SA Chairman Vincent Bollore are discussing an exchange of shares which could develop into a broader alliance to take on digital players and Rupert Murdoch’s Sky Plc in Europe, people familiar with the negotiations said this month.
Closer cooperation could mean the combination of Mediaset’s offerings with those of Canal Plus, Vivendi’s pay-television and production arm, those people said. EI Towers SpA, the broadcasting tower company controlled by Mediaset, is in talks to buy a stake in Italy’s largest phone carrier tower unit, Inwit SpA, from Telecom Italia.
“The pay-TV market in Europe is facing important developments like consolidation and integration between phone carriers and broadcasters,” Marco Giordani, Mediaset’s Chief Financial Officer said on conference call with analysts. He said Mediaset is not a simple seller of its pay-TV unit because it’s part of the company’s core business.
The Premium pay-TV unit reported full-year revenue of 559 million euros, an increase of almost 4 percent from a year earlier.
TV-industry ad revenue in Italy rose 4.7 percent in January, according to researcher Nielsen. The full-year 2015 figure rose 0.7 percent to about 3.6 billion euros.
Mediaset will pay a common-share dividend of 0.02 euros, unchanged from the previous year.