Bertelsmann hit by Five writedown

25 March 2009

GÜTERSLOH, Germany: Bertelsmann, the German media group, saw its net profits fall by around a third to €270 million ($365m; £248m) last year, a slump largely attributed to a writedown of various assets, including its UK TV channel Five.

The company, the world's fourth largest media group behind News Corp, Disney and Time Warner, reported that revenues "remained stable" at €16.1 billion, down just 0.5% year-on-year.

As previously reported, its European broadcast arm, RTL, saw profits fall to €194m last year compared with €563m in 2007, largely as a result of a goodwill charge of €337m relating to Five.

However, Bertelsmann said RTL, which contributes 35% of its total revenues, was able to "buck the declining TV ad sales markets in many areas."

The German media giant also stated that its magazine publishing arm, Gruner + Jahr, suffered from a slowing ad sales market and weakening consumer confidence, with total revenues declining from €2.6bn in 2007 to €2.4bn last year.

Thomas Rabe, the company's finance director, said that he did not expect the company making a loss this year, but admitted it could face further impairment charges if the recession deepens, particularly relating to its TV operations.

Data sourced from Financial Times; additional content by WARC staff