French television broadcaster, TF1, last night reported weak advertising revenues, with Q2 dropping by 4.1% to E419.2 million – an underlying decline of 11.0% when the World Cup effect is excluded, according to estimates by Lehman Brothers.
TF1 is heavily reliant on advertising as a source of profit. The poor performance has led Lehman to downgrade its ad growth forecasts from 0.5% to -0.5% for 2002 and to 3.0% from 4.0% for 2003. The broker believes that the figures released last night represent TF1’s worst second quarter ever.
Analysts at ABN Amro are less surprised, as the figures were exactly in line with their predictions, which were themselves at the bottom end of consensus expectations. ABN is predicting a full year advertising growth of 1.0% for 2002 (down from a previous forecast of 3.5%). Current forecasts, says the broker, point to a growth of 0.5%-3.0% this year.
A small advertising pick-up is predicted by ABN in the second half of the year, with 4.0% growth in Q3 and 5.1% growth in Q4. However, as Q3 is light in terms of gross revenue, the full year performance is heavily dependent on Q4, which remains subject to poor visibility.
Earlier this month TF1 confirmed that it is interested in acquiring Kirch Media (see TF1 Confirms Preliminary Interest In Kirch Media).
