Paris-based global conglomerate Vivendi Universal, led by controversial chief executive Jean-Marie Messier, yesterday posted a widened Q1 loss of €17.01 billion ($1534bn; £10.53bn) or €16.52 a share.
The plunge is due to the removal from Vivendi’s accounts of that accountants’ ectoplasm, goodwill amortization. The change, made to comply with US GAAP (generally accepted accounting practice), reflected the removal of €17.06 billion from the profit and loss account.
Under recently amended US rules, the writing-down of goodwill – formerly a routine practice – is no longer allowed. It remains in virgin state on the balance sheet until it is deemed impaired.
But for this trifling formality, Vivendi would have earned €51 million (5 Euro-cents a share) compared with a year-earlier loss excluding goodwill of €144 million (14 E-cents). Its media and communications business earned €436m, up year-on-year by 44% from €303m. Revenue increased 21% to €7.11bn from €5.85bn.
Messier put a positive spin on the numbers: “In a very difficult economic environment, characterized by many market uncertainties, Vivendi Universal's global businesses gained market share. In addition, strong improvement was achieved in cash management, debt reduction, synergies, management development and revenue growth.”
Data sourced from: The Wall Street Journal Online; additional content by WARC staff