Europe’s largest television company RTL Group has cut its 2014 outlook, citing among other issues a new advertising tax in Hungary that hit its earnings in the first half of the year.
The broadcaster said it now expected 2014 revenues to decline slightly, with a more significant decrease in earnings before interest, tax and amortisation (EBITA), having previously seen both figures remaining broadly stable.
In the first half of 2014, revenues eased by 2.5 per cent to €2.69 billion and EBITA was down 6 per cent at €519 million.
With the exception of France, which was down 2.4 per cent, all European net TV advertising markets in RTL’s territories were up year-on-year.
Despite the signs of recovery, the reported group revenue was down largely as a result of negative exchange rate effects, lower advertising sales in France and lower revenue from FremantleMedia and UFA Sports.
RTL Group’s digital revenues continued to show dynamic growth, up 10 per cent to €113 million due to organic growth and new acquisitions.
“Our results for the first half of 2014 show a mixed picture: once more, we’ve achieved a solid operating performance, with record results from our biggest profit centre in Germany and significantly higher EBITA from RTL Nederland. We’ve also made consistent progress in implementing our ‘broadcast – content – digital’ strategy,” said Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group. “However, some factors weigh on our half-year results. The economic environment in France remains difficult for our local TV and radio operations, while FremantleMedia faces continued pressure on volumes and prices. In addition, the new advertising tax in Hungary will strongly reduce the profitability of RTL Hungary.”