August 30, 2017 / 9:24 AM / a year ago

RTL beats second-quarter expectations despite challenging ad market

FRANKFURT (Reuters) - European broadcast group RTL (RRTL.DE) compensated for a “challenging” TV advertising market in the second quarter with a strong performance by its FremantleMedia production arm and confirmed its 2017 forecasts on Wednesday.

Its report of a 9 percent rise in sales and 4 percent increase in adjusted core profit came a day after rival ProSiebenSat.1 (PSMGn.DE) cut its TV ad market outlook for a third time this year, sending its shares to a four-year low.

RTL Group said all the European TV ad markets in which it is active decreased during the first half. Its main markets are Germany, France, the Netherlands and Belgium.

“The challenging development of the TV advertising markets across our footprint is a clear signal to even accelerate our strategy execution,” co-Chief Executives Bert Habets and Guillaume de Posch said in a statement.

RTL, which is majority-owned by German media group Bertelsmann (BTGGg.F), said it would take full ownership of ad-serving platform SpotX and make other ad technology investments. It bought 65 percent of SpotX in 2014 for $144 million.

Shares in RTL, which had lost more than 5 percent of their value on Tuesday, traded 4.6 percent higher in Frankfurt (RRTL.F) ahead of the main market open.

Media groups including Britain’s WPP (WPP.L) have warned in recent weeks of a slowdown in advertising spending by consumer-goods groups such as Unilever (ULVR.L), Nestle (NESN.S) and Procter & Gamble (PG.N) - the world’s biggest advertisers - as they respond to weak global economic growth.

RTL said it would pay an interim dividend of 1 euro per share in September.

Second-quarter revenue rose to 1.57 billion euros ($1.88 billion), beating the average forecast of 1.54 billion euros in a Reuters poll.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 4 percent to 362 million euros, in line with the poll average.

($1 = 0.8359 euros)

Reporting by Georgina Prodhan; Editing by Maria Sheahan

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