Italy’s Mediaset saw its Q1 2018 revenues and profit drop significantly year-on-year, despite what the media group described as a confirmation of the return to profitability for its full-year 2017 results.
The broadcaster posted revenues of €860.6 million for the quarter, down from €889.3 million for the comparative period last year, which the company blamed on a slowdown in the advertising market. The broadcaster was hit by a slowdown both in Italy, where revenues fell from €649.3 million to €631 million, and Spain, where turnover fell from €240.4 million to €229.6 million.
While operating costs were also down, EBIT dipped from €76.2 million in 2017 to €53.9 million, with declines both in Italy and Spain. Net profit fell from €15.8 million to €3.5 million.
On a more positive note, net debt fell to €1.377 billion from €1.392 billion at the end of last year.
The results follow the Italian broadcaster striking a deal with Telecom Italia to distribute its channels on the TIMVision platform. That agreement followed a wider pay TV deal with Sky that will see the pair combine their pay TV efforts across satellite and digital-terrestrial platforms.
Mediaset president Fedele Confalonieri said that Mediaset was open to distribution deals with other partners.
Analysts at Berenberg said that the results were “bang in line” with expectations, with advertising revenues hit by the timing of Easter and uncertainty around the Italian elections. They said that April had seen an uptick in ad sales and that there was “all to play for with the World Cup” later this summer, having acquired the rights to the tournament in Russia at a net cost increase of €45 million.
Berenberg also noted that advertising by telcos – Mediaset’s sixth largest segment – is likely to pick up when Iliad Telecom launches a mobile operation in the country before June 21. The analysts reiterated their ‘buy’ rating for Mediaset stock.