By Leila Abboud and Gwénaëlle Barzic
PARIS Feb 19 France's largest private
broadcaster, TF1, said the TV advertising market could
shrink again this year after it posted lower sales and flat net
profit for the fourth quarter of 2013.
"In a gloomy economic climate with no sign of recovery and
visibility still poor, the net television advertising market
could see a contraction in 2014," TF1 said on Wednesday.
Fourth-quarter revenue fell 5.7 percent to 724 million euros
($996 million). Current operating profit rose 14 percent to
118.8 million euros, while net profit was stable at 137 million.
Analysts had forecast fourth quarter sales of 756.5 million
euros and net profit of 69 million euros, according to Thomson
TF1 shares were down 2.7 percent by 0816 GMT. Analysts at
Liberum said market expectations for TF1 this year would need to
come down "given the lack of advertising momentum and visibility
and rising competition in the French market".
TF1's competitor M6 echoed the downbeat tone on
the French advertising market after publishing results on
Tuesday. Yet its shares rose 1.7 percent to 16.96 euros because
its ad sales were ahead of expectations.
Analysts explained that M6 had been more willing to cut
prices on advertising than its larger rival TF1.
TF1 continued to cut costs, including on programme costs and
overhead, to bolster its profits even as advertising sales
contracted. Some 41 million euros were taken out of the cost
base last year, and TF1 said it was on track to hit a cost cut
target of 85 million by year-end.
Philippe Denery, chief financial officer, promised that the
efforts to "adjust the company's cost structure" would continue.
The group said it would pay a stable dividend of 0.55 per
share for the year.
It stayed silent on how it would use the proceeds of a deal
announced in January to sell a controlling stake of TV channel
Eurosport to Discovery Communications. An additional stake could
also be sold this year under a put option.
"Our first priority is to keep a strong balance sheet,
second is to be able to seize opportunities that come up to
strengthen the business, and third is returning money to
shareholders," said Denery.
"We will need to redeploy some of the cash to develop the
business after the Eurosport exit, but that will not impede some
return to shareholders."
Media reports have said TF1 could be interested in buying
NextRadio, which owns business channel BFM, or online
video player Dailymotion, although Denery declined to comment on
TF1's market capitalisation stood at 2.9 billion euros at