GG Vivendi

[Dregor Thule]

Vivendi Universal on Wednesday attempted to make amends with frustrated investors, offering an increased dividend as the company posted sharply higher earnings for 2005.

The French telecommunications and media company, which flirted with bankruptcy in 2002 and wiped out the savings of thousands of private investors, offered to pay out 55 percent of its adjusted net profit for 2005. The proposed payout is equivalent to €1 a share, more than expected by analysts.

The group's net adjusted earnings of €2.08 billion, or $2.48 billion, for 2005 comfortably beat its own forecast of "more than €1.8 billion" and were up 55 percent from 2004.

The net adjusted figure strips out the impact of disposals, acquisitions, interest, taxes and a number of nonrecurring items.

The 2005 results "look very good," said Jean-Édouard Reymond, a fund manager at Union Bancaire Privée in Paris.

The Paris-based company, which restored the dividend in 2005 after a two- year hiatus, had to sell assets to cut debt but is now back on the acquisition trail.

The stock, which hit a high of nearly €130 in 2000, has been crawling back from a low of €12.47. It was up 1.5 percent at €25.83 early Wednesday afternoon.

Looking forward, Vivendi, which runs one of France's largest mobile operators, SFR, and Universal Music, the world's top record company, forecast that net adjusted profit would rise between 11 percent and 13 percent in 2006.

"In the first few months of 2006, we are already seeing encouraging signs, and the dynamics in each of our businesses are consistent with 2005," the chief executive, Jean-Bernard Lévy, said. This year will show "further improved growth and improved profitability, which should lead to an additional increase of next year's dividend," he said.

The company reported earnings for the period under International Financial Reporting Standards for the first time.

Operating profit, which Vivendi calls earnings from operations, slipped 13 percent, to €747 million, hurt by a €220 million fine for its SFR unit for price collusion in the French mobile phone market.

The company said a month ago that fourth-quarter sales rose 6.9 percent, lifted by SFR. The mobile phone unit, Vivendi's largest business, was fined last year for colluding with France Télécom's Orange and Bouygues Télécom on prices.

Lagardère agreed last month to buy 20 percent of Vivendi's French pay-TV business in exchange for its stake in a satellite broadcaster and €525 million in cash. That was after Vivendi agreed to merge the pay-TV assets with Télévision Par Satellite, or TPS, owned by Société Télévision Française 1 and M6- Métropole Télévision.

The success of the online game World of Warcraft helped turn an operating loss of €203 million in 2004 at the company's games unit into a profit of €41 million in 2005. In an investor presentation available on Vivendi's website, VU Games said that revenue should rise 12 percent to 15 percent in 2006 and that its operating margin should reach 8 percent to 10 percent.

Meanwhile, SFR, which generates the bulk of the earnings and cash, said it expected sales to remain stable or to increase slightly in 2006, hit by lower prices, though operating profit from the business should grow 8 percent to 10 percent.

SFR's forecast came after Bouygues Télécom disappointed some investors on Wednesday by forecasting sales growth of only 1 percent for 2006.

Universal Music Group said it expected a slight increase in revenue in 2006 as digital sales more than compensated for a drop in record sales.

The group's pay-TV unit, Canal Plus, which recently agreed to acquire its smaller rival TPS, forecast a stable operating profit for 2006 on sales growth of 4 percent to 6 percent.

Now how about putting more of those euros back into the game that gave you the big turn around, hmm?

[masteen]

Fuck that. The CEO needs an ice sculpture of David that pisses champagne for his birthday party this year!

[kyoukan]

yea I'm sure its lack of money that keeps WoW from regressing into crapdom.