German media giant Bertelsmann AG said this morning it had returned to profit in the second quarter, posting positive first-half operating earnings after a negative first quarter in the wake of the war against Iraq.
The company reported earnings before interest, tax and amortization (EBITA) of 228 million euros ($250 million) for the six months to June 2003 compared with 175 million euros in the same period last year.
Bertelsmann said the improvement was due to reduced losses at its book and music club division Direct Group, a good performance by the RTL television group and restructuring across the company.
RTL, Europe's largest broadcaster, reported first-half operating profit up 40 percent on Wednesday and said it saw signs, especially in Germany, that the bottom of the advertising recession may have been passed.
Despite weak consumer spending in the first quarter, unlisted Bertelsmann repeated its forecast that full-year profits would be up on last year's.
First-half sales were down to 7.9 billion euros in the six months to the end of June, compared with 8.8 billion euros in the same period last year.
Bertelsmann, which has said it needs to cut its debt to make new acquisitions, slightly reduced its net debt figure over the six months to 2.63 billion euros compared with 2.74 billion euros at the end of December 2002 - its highest ever.
The company sold the New York offices of its book publisher Random House in July for $297 million, and the sale of science and trade publisher Bertelsmann-Springer for 1.05 billion euros to British private equity firm Candover Investments is expected to go through next week.
Bertelsmann said in March it was interested in buying AOL Time Warner's book unit and in increasing its stake in Spanish television station Antena 3.
The German media group has also been in talks with AOL to merge their recorded music divisions in a bid to rival industry leader Vivendi Universal.
Sources familiar with the negotiations said last month Warner Music and BMG could wrap up a deal in September that would create the world's second-biggest music company.
BMG made a first half EBITA loss of 117 million euros compared to a loss of 45 million in the same period last year.
It numbers Christina Aguilera, Justin Timberlake, Avril Lavigne and R. Kelly among its recording artists.