Vivendi Q2 net profit drops by 43%

The French media and telecommunications group Vivendi posted on Thursday a 43 percent drop in second quarter net profit owing to higher taxes and a decline in the group's core earnings. Vivendi said its net profit fell to 463 million euros ($580 million dollars) in the three-month period, on sales that slipped by 1.5 percent to 6.96 billion euros, results that did not prevent its share price from jumping higher. Analysts polled by Dow Jones Newswires had nonetheless forecast a slightly smaller decline in sales to 6.98 billion euros. Core earnings fell by 20.6 percent to 1.3 billion euros meanwhile, owing to a weaker contribution from Vivendi's telecoms unit SFR and the effect of IFRS accounting standards on the launch of the Activision Blizzard video game. SFR sales declined by 7.5 percent from the first quarter of 2012 to 2.8 billion euros, amid growing competition on the mobile market and owing "to several price cuts imposed by the regulators," a statement said. For the first half of 2012, sales declined by 1.2 percent from the same period a year earlier to 14.1 billion euros, while core earnings before interest, taxes and amortisation (EBITA) lost 12.7 percent to 2.9 billion. Net profit dropped by 16.6 percent to 1.5 billion euros, "mainly due to a decrease in EBITA and increased taxes," the statement said. The first-half results led to Vivendi chief executive Jean-Francois Dubos confirming a full-year adjusted net income forecast of more than 2.5 billion euros "before the impact of transactions announced during the second half of 2011 ... and telecoms restructuring charges." Investors welcomed the second quarter figures, and Vivendi shares showed a gain of 3.44 percent to 15.63 euros in morning trades on the Paris stock exchange, which was down by 0.20 percent overall.