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Media News

UPDATE 1-Havas H1 core profit, revenue down

* H1 underlying revenue down 9.2 percent

* H1 operating margin 10.2 percent vs 10.9 pct a year ago

* No outlook in statement, net debt down 47 percent

(Adds detail from statement)

PARIS, Aug 31 (Reuters) - World number six advertising group Havas EURC.PA posted a 13.1 percent drop in first-half core profit on Monday as clients cut spending amid a global economic downturn.

Havas did not give an outlook for 2009 in the statement after underlying sales fell 9.2 percent in the first six months, hit by continued weakness in Britain, Southern Europe and in North America.

In June, chairman Vincent Bollore predicted 2009 sales would not fall more than 10 percent and the company would limit the impact on earnings through cost controls.

Havas, whose clients range from France Telecom FTE.PA to Coca-Cola KO.N, achieved net new business of 813 million euros ($1.16 billion) and cut net debt by 47 percent to 179 million.

Global advertising sector revenues have been battered this year as clients have cut spending during the downturn.

Last week, British marketing group Aegis AEGS.L, also majority-owned by Bollore, posted a 10.8 percent fall in first-half like-for-like sales. [ID:nLR341622]

Havas fared worse than its main rivals in the first half. British WPP WPP.L, the world's largest advertising group by revenue, has reported a 8.3 percent fall in like-for-like sales, U.S. group Omnicom OMC.N a drop of 8.8 percent, and French firm Publicis PUBP.PA posted a drop of 6.6 percent.[ID:nLL425958]

Operating profit at Havas declined 13.1 percent to 71 million euros while revenue reached 700 million.

This meant a first-half margin of 10.2 percent of sales against 10.9 percent a year ago. Cost-cuts helped limit the profitability decline, the statement said.

Bollore is the largest shareholder of Havas, with a 32.9 percent stake. He is also the largest shareholder of media-buying agency Aegis with 29.9 percent.

The situation has fuelled speculation Bollore could seek to merge the two groups to help them better compete with larger rivals such as Publicis or WPP.

Aegis interim chief executive and chairman John Napier said on Friday there were no talks about a possible merger with Havas.

Havas shares closed down 2.5 percent at 2.12 euros on Monday. The stock has gained 48 percent this year, sharply outperforming the European media sector .SXMP. (Reporting by Dominique Vidalon; Editing by Dan Lalor) ($1 = 0.6998 euro)

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