Five loses £31 million in the first half of the year

Channel Five lost £31 million in the first six months of 2009, according to parent company RTL Group’s financial results.

The broadcaster, which reported an operating loss of €19 million for the six-month period, was forced to write down an additional €22 million on the value of its programmes and forked out €8 million in restructuring charges.

RTL, which is owned by the German company Bertelsmann, said the channel’s results were “strongly affected by the economic downturn”.

Five was forced to cut costs by as much as 13% (around €22 million) between January to June this year in a bid to counter falling advertising revenues, alongside all of RTL’s commercial TV businesses, which include RTL in Germany and the Netherlands.

However, the goodwill impairments at both Five and the Alpha Media Group in Greece were named as the cause of the significant €105 million net loss attributable to RTL’s shareholders.

Overall, RTL made a loss of €62 million, while its underlying revenue was down 10.4% year on year over the six-month period.

However, the pan-European company said its investments in content production and other non-broadcast businesses had helped it reduce the effect of the recession.

RTL predicts little improvement for the second half of the year – “RTL Group currently sees no significant change to the European TV advertising market conditions in the second half of 2009, therefore it has to be expected that the profitability level will be considerably down compared to 2008, as already announced,” the company said.

Gerhard Zeiler, RTL’s chief executive, added: “RTL Group expects no quick change to the TV advertising market conditions and is, therefore, aiming for a significantly reduced cost base in our core business. In order to adapt to the new market realities, we need to gradually lower our production and acquisition costs, and structure our processes even more efficiently.

“Our goal is to achieve these savings while maintaining our leading audience market positions. This is very challenging, but achievable. In the first half of 2009, we already managed to significantly reduce costs while simultaneously increasing our audience share in many markets.”