* Q2 recurring core profit up 6.8 percent
* Q2 sales up 6.5 percent
* CEO sees moderate growth in core German TV ad market
* Shares reverse gains, down 9 percent
(Adds more CEO comment, updates shares)
By Nicola Leske
BONN, Germany, Aug 4 German commercial
broadcaster ProSieben PSMG_p.DE flagged moderate growth in its
core TV advertising market this year, unsettling investors and
overshadowing a 7 percent rise in quarterly profit.
Traders said Chief Executive Thomas Ebeling's comments on
the outlook knocked ProSieben's shares, which were down 9.2
percent at 1203 GMT. The German mid-cap index was down
The broadcaster's shares had risen more than 4 percent
earlier on Thursday after ProSieben said higher advertising
sales lifted second-quarter by nearly 6.8 percent and it was on
course for a record year.
Some analysts also expressed doubt about the company's
strategy of diversifying to become less dependent on TV ad
"We stick to our opinion that ProSiebenSat1 has no good
strategic position with respect to the diversification
revenues," DZ Bank analyst Harald Heider adds, keeping the
shares at "sell".
Like other broadcasters, ProSieben is keen to expand its
offers amid fragmenting audiences and tap into the Internet TV
market, betting that online advertising will compensate slumping
ad revenues and fragmenting audiences.
For the time being, ad revenues are growing again after a
double-digit decline in 2009.
The company said TV advertising revenues grew all across its
Northern operations and were particularly strong in Norway and
Denmark in the second quarter.
ProSieben, which bought European group SBS broadcasting in
2007, sold its Dutch and Belgian assets in April but decided to
keep its SBS operations in Scandinavia, where it predicted
The decision had disappointed some analysts at the time but
the quarterly ad sales showed it was a clever move.
Ebeling said the company was planning to hold onto its
Nordic assets for at least three to five years while it looked
around for acquisitions.
Ad sales in Germany, Switzerland and Austria were higher
than a year earlier.
A RECORD YEAR
Others analysts were more optimistic.
"The growth story still continues," Dirk Voigtlaender at
Commerzbank said, adding that ProSieben had also managed to
improve its TV ratings in Germany and that its Sixx channel
aimed at a female audience had gained audience share.
ProSieben, which competes with Bertelsmann-owned RTL Group
, said second-quarter recurring earnings before
interest, tax, depreciation and amortisation (EBITDA) rose to
238.7 million euros ($340.2 million) on sales growth of 6.5
percent to 692.2 million euros.
The figures are adjusted for the sale of ProSieben's Dutch
and Belgian assets, which it sold for 1.23 billion euros to pay
down debt, the company said.
Unadjusted core profit was 272 million euros and sales were
799.6 million euros, beating analysts average estimates of a
flat recurring core profit of 264 million euros on sales of 788
ProSieben reiterated it anticipates a medium single-digit
percentage sales growth this year.
"We are on our way to another record year," Ebeling said in
ProSieben, whose shows include U.S. award winning comedy
series The Big Bang Theory and comedy-drama Desperate
Housewives, is controlled by private equity firms KKR
and Permira .
(Additional reporting by Andreas Kroener in Frankfurt;
Editing by Erica Billingham)