MFE sees revenues dip but EBIT rises

MediaForEurope (MFE) saw revenues slide modestly in the first quarter as inflationary cost pressures dampened the ad market, but was able to improve its EBIT and net profit through cost savings.

MFE posted revenues of €646.6 million for the quarter, down for €654.3 million for the prior year period. EBIT rose from €15.3 million to €19.3 million thanks to reduced operating costs. The group posted a net profit of €10.1 million, up from €2.7 million.

In Italy, revenues were more or less flat at €465.2 million, with ad revenues rising by 0.4%, less than the market uplift in advertising of 3.1%. MFE said that the first quarter traditionally favours advertising sales for the public broadcaster in Italy. The group’s EBIT loss improved to negative €9.6 million from negative €14.7 million.

In Spain, net revenues from €188 million to €181.5 million, with ad sales falling due to general economic conditions. EBIT remained positive, dropping slightly from €29.9 million to €28.8 million.

MFE said it expected to see some improvements in the ad market in the second quarter “even though the economic environment remains weak and uncertain”.

The group noted that comparisons with the next two quarters would be with prior year periods where MFE’s performance was adversely impacted by the war in Ukraine.

It also noted that its fourth quarter performance last year was adversely hit by its lack of rights to the football World Cup, which again will have an impact on year-on-year comparisons.

MFE “confirmed its role” as a long-term shareholder in Germany’s ProSiebenSat.1 following its move to round up its stake this week, but also warned that ProSiebenSat.1’s downward revision of its dividend would mean lower income to MFE this year from the investment – down from €42 million last year to only €3 million.