Vivendi Upbeat Despite Mounting Losses

28 November 2002

Vivendi Universal’s recent cash crisis is over, the media mammoth told analysts as it posted widening third-quarter losses.

After the departure of controversial former boss Jean-Marie Messier, the company has been scrambling to sell assets and negotiate new financing packages with its banks to avoid a liquidity crunch.

Vivendi now expects to have €4.5 billion (€4.5bn; £2.9bn) in cash by the end of the year – enough to counter Vodafone’s bid to take over French telecoms firm Cegetel. The news pushed the group’s shares up 3% to €15.30.

That said, losses grew in the third quarter, widening from €960 million last year to €1.23bn due to capital losses on sales of units, raised taxes and higher interest payments.

In particular, Vivendi was hit by poor performances at its US entertainment assets. Operating income tumbled 89% at Universal Music Group to €16m, and slumped 30% to €222m at movie, cable-TV and theme park group Vivendi Universal Entertainment.

Such results underline the importance to Vivendi of Cegetel, which posted 64% operating earnings growth to €460m.

VUE was recently the target of a $20bn takeover bid from oil magnate Marvin Davis, which Vivendi refused. However, chief financial officer Jacques Espinasse did not rule out a future sale, saying it “depends very much on what kind of an offer” was received and “what vision of the company” is developed.

Data sourced from: multiple sources; additional content by WARC staff