MILAN: Commercial television broadcaster Mediaset, controlled by controversial former Italian premier Silvio Berlusconi (pictured), has seen its share price continue to slide in the wake of analysts' doubts over its fiscal credibility and the way it accounts for its TV ad revenues.
Problems manifested themselves last Thursday after the company declared it expected revenue for its advertising sales unit, Publitalia, to be €2.8 billion ($3.76bn; £1.9bn) in 2006, a fall of 3.6% on the previous year, and a concomitant 16.3% year-on-year dip in net profit to €505 million.
To rub salt into to the wound, Mediaset also said it was shifting some €90m in ad revenue from 2006 to 2007, creating a shortfall for last year.
The announcement drove down stock prices 5% on Friday and a further 1.2% this week.
Analysts at Goldman Sachs now expect Mediaset's traditionally strong fourth quarter TV ad sales figures will have fallen by 9% year on year, a sign that problems in the market are worse than previously estimated.
Ceo Giuliano Adreani defended the numbers, claiming Publitalia closed 2006 "in a very positive way, equalling the 2005 record results".
He expected 2007 to be a better year than last. The company suffered as rivals RAI and Sky Italia won the rights to the soccer World Cup and the Winter Olympics in Turin.
Meantime, according to reports in Italian newspaper Corriere della Sera, Mediaset could launch eight digital terrestrial pay TV channels in a bid to lure customers from Sky Italia.
Data sourced from Financial Times online; additional content by WARC staff