RTL Group unveiled a grim outlook for European television broadcasting on Wednesday when it warned that worsening advertising conditions would push its full-year core profits further into the doldrums.
RTL Group, Europe's biggest commercial TV broadcaster, said a downturn in European advertising revenues dragged half-year earnings 27 per cent lower and there were no signs that an upturn would be forthcoming any time soon.
Earnings before interest tax and amortisation (EBITA) fell to 235 million euros ($217.4 million) from 321 million, after restructuring and broadband costs, and the group said it was making a 2.28 billion euro non-cash goodwill adjustment to take account of the fall in asset values since its merger last year.
Television has fared badly in the economic downturn as advertisers cut back on costly forms of promotion, prompting many broadcasters to issue profit warnings. RTL Group itself warned in July that full-year EBITA would be 10-15 per cent lower.
Since July, markets have continued to decline and visibility has not improved. The phasing of the recovery cannot therefore be predicted with certainty. Under current conditions, the decline in EBITA could therefore be greater than the level indicated in July, RTL Chief Executive Didier Bellens said.
RTL, which produces programmes such as The Price is Right and Neighbours , saw its shares fall 2.7 percent down in Brussels at 36 euros at 0845 GMT but were untraded in London. Analysts had been predicting EBITA of around 244 million euros.