Thomson SA experienced net losses of €636 million in 2004, smaller than analysts had feared, hit by the cost of restructuring its television tube and components businesses.

But its shares rose nearly 2 per cent, as investors yesterday hailed solid growth prospects at the core media and entertainment businesses and a 10 per cent dividend increase. The stock gained 1.5 per cent to €21.23 in early trading, outpacing European peers.

"2004 allowed us to turn the page at financial level on the low-margin, base-technology business," chief executive Frank Dangeard said in a conference call about the group's results.

Thomson is transforming itself from a low-margin consumer electronics company into a high-margin provider of services to film studios and media firms, and is trying to find partners or buyers for its cathode ray TV tube (CRT) business.

The group plans to take charge of €130 million to €150 million tied to that business this year, Mr Dangeard said. Thomson's €636 million net loss follows a €26 million profit in 2003.

After €904 million in exceptional costs, the group's earnings before interest and tax fell to a €338 million loss against a profit of €252 million in 2003. That was better than the €402 million loss analysts had forecast.

Exceptionals included a €667 million charge for its displays business, for which Thomson is also seeking partners.

Mr Dangeard said Thomson had received "many offers" from potential financial or industrial partners, notably Asian firms, for its displays activities - and that it hoped to have a shortlist of candidates by the end of this month.

Revenue fell 5.5 per cent to €7.99 billion, mostly due to Thomson's exit from the low-margin production of television sets. - (Reuters)