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Mediaset’s Q1 operating profit hit by Covid-19 crisis

Mediaset’s operating profit fell by 47 per cent year-on-year in the first quarter of 2020 as the Italy-based commercial broadcasting group was hit hard by the Covid-19 crisis.

Mediaset’s first-quarter operating profit on a consolidated basis was €41.6m ($45.2m), a significant drop-off from the previous year’s €78.5m.

Mediaset noted that its performance after the first two months of the year was positive but the overall first-quarter performance can be attributed to the “sharp slowdown in the advertising market” in March in both Italy and Spain, where the broadcaster operates.

The broadcaster added that the current situation remains “critical” and “does not permit much visibility” in terms of future performance.

Mediaset’s net revenues for the first quarter of the year amounted to €682.1m, compared to €718.2m for the first quarter of 2019. In Italy, revenues dropped from €492.1m in the same period last year to €452.4m, while in Spain revenues amounted to €229.8m compared with €226.1m in 2019.

In Italy, gross television advertising revenues rose by 2.1 per cent until the end of February compared with 2019. However, when including the March figures, the first quarter ended with sales of €427.5m, down on the €483.6m posted in the first three months of 2019. In Spain, gross television advertising revenues totalled €202.8m, compared with €223.7m the previous year.

Total consolidated operating costs remained much the same, with Mediaset posting €640.6m this year compared to €639.7m in the first quarter of 2019. In Italy, costs fell to €472.7m, mainly due to the management and review of schedules launched in March to deal with the impact of the Covid-19 crisis.

Consolidated net profit also fell considerably year-on-year, from €36.7m to €14.6m. Net financial debt to March 31, 2020 came to €1.23bn, compared with €1.35bn at the beginning of the period.

Mediaset recently furthered its efforts to create a pan-European media group by raising its stake in ProSiebenSat.1 last month.

Mediaset secured an additional stake of up to 4.1 per cent of the share capital of ProSiebenSat.1, meaning it now has up to 24.9 per cent of the voting shares of the company. The additional stake means its interest in ProSiebenSat.1 has risen from 20.1 per cent to 24.2 per cent.

The ProSiebenSat.1 suite of channels include the flagship Sat.1 channel in Germany, along with ProSieben, ProSieben Maxx and Kabel Eins. In Austria, the group also owns and operates Puls 4, which holds Uefa Europa League rights (from 2018-19 to 2020-21). Sports broadcast rights held by ProSiebenSat.1 include American football’s NFL, ESL esports events and WWE wrestling.