Lagardere Warns Of EUR900 Million Impairment Losses On Market Jitters
February 07 2012 - 2:35AM
Dow Jones News
French media-to-defense conglomerate Lagardere SCA (MMB.FR)
Tuesday warned of potential impairment losses of EUR900 million on
Canal Plus shares and some of its assets due to market volatility
as it reported a drop in fourth-quarter revenue.
Revenue in the three months to Dec. 31 fell 9.1% to EUR1.95
billion from EUR2.15 billion a year earlier, while full-year
revenue dropped 3.9% to EUR7.66 billion from EUR7.97 billion a year
earlier.
Lagardere confirmed its target for recurring earnings before
interest and taxes for its media division in 2011 of a decline of
about 5% to 12% on a constant exchange rate basis compared to
2010.
"In 2011, the weak environment in global economy and in stock
markets on the one hand, and the performances for the second half
2011 and prospects of the Unlimited branch on the other hand, are
likely to give rise to significant impairment losses," the company
warned.
"On the top of that, impairment losses on Canal+ France shares
will be added. Overall, the impairment losses, which are mainly
related to these two assets, may amount to around EUR900 million,"
it said.
Eight years ago, Lagardere's current Chief Executive Arnaud
Lagardere inherited control of a conglomerate with business
interests as diverse as automobiles and television stations.
Lagardere pledged to prune the businesses into a pure media group
built around four pillars: book publishing, media in France, travel
retail and sports marketing.
Time is ticking however, as the asset sales are taking time to
materialize and Lagardere's EUR1 billion bet on building a global
sports-marketing business continues to worry investors. In 2011,
the sports marketing business recorded sales of EUR454 million, up
14.5%, due to the acquisition of U.S.-based agency Best and the
consolidation of Lagardere Racing Paris.
Lagardere plans to sell minority stakes in non-core businesses,
notably a 7.5% stake in European Aeronautic Defence & Space Co.
(EAD.FR), parent company of aircraft maker Airbus, and a 20%
interest in Canal Plus France, a pay-TV business controlled by
Vivendi SA (VIV.FR). Analysts say the combined non-core stakes
could be valued at as much as EUR3 billion.
-By Geraldine Amiel and Max Colchester, Dow Jones Newswires; +33
1 40171767; geraldine.amiel@dowjones.com
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