Zeiler announces Five’s €41 million loss last year
RTL has been forced to write down the value of Channel Five by more than half following losses of €41 million (£37 million) in 2009.
The write down values RTL’s Five subsidiary, which also includes Fiver and Five USA, at €112 million. Overall, the Five group saw revenues drop 30% year on year to €303 million.
Channel Five group’s operating earnings before interest tax and amortisation fell from a €2 million profit in 2008 to a loss of €10 million last year. Although, this represents half the €19 million loss that the group was running at in the first six months of 2009.
This loss consisted of a 75% year on year decline in earnings before interest, tax and amortisation to €4 million at Channel Five and a loss of €14 million at digital channels Fiver and Five USA.
RTL also confirmed that after several years of growing its share of the UK television advertising market, Channel Five’s share dropped from 9.6% to 8.4%.
The European broadcaster, which also owns The X Factor producer FremantleMedia, said Five has reduced its operating costs, excluding restructuring costs and write-downs, by around 19% (£65 million) as a result of “significant programme cost savings”.
Gerhard Zeiler, chief executive officer of RTL, said: “Although the revenue decline has slowed considerably since autumn 2009, we cannot expect a quick recovery of advertising revenues to previous levels.
“While we remain cautious, we will also continue to invest in promising business opportunities, based on our strong brands and content. These include on-demand services as non-linear TV viewing grows rapidly, digital pay channels to establish a second revenue stream, content production, and our broad range of diversification businesses.”
Overall, RTL Group reported an annual net profits rise of 5.7% to €205 million. This compares to a net profit of €563 million two years ago.
Total underlying group revenue dropped by 7.5% to €5.28 billion, while earnings before interest, tax and amortisation declined by 17.6% to €755 million.
“In 2009, RTL Group had to operate in a tough economic environment, in particular during the first half of the year when the TV advertising markets declined at double-digit rates,” Zeiler added. “With a strong year-end finish, RTL Group again achieved good full-year results and continued to operate at high levels of profitability.
“The 2009 results across all our countries also show that our industry is flexible and resilient even in difficult situations and is able to master the challenges of the future.”