Vivendi Universal revealed today the full impact of selling most of its entertainment business, as impairment charges incurred from the deal were largely behind a nearly trebled first-half net loss of €1.86 billion.
However, strong sales from Vivendi's cellphone unit SFR and pay-TV Canal Plus boosted operating profit.
France's largest media group, which has undergone a radical overhaul to bring debt under control, also pledged to make an adjusted net profit for the full year of "above one billion euros", which it said was an upgrade of its previous guidance.
However, the company had not given precise 2004 targets in the past, saying in March only that it expected adjusted net income to "grow very strongly" this year.
"The first-half numbers look fine," said Mr Ian Whittaker, analyst at ABN Amro in London. "However, the comments on the (guidance) upgrade seem to relate more to tax credits that should have been already factored into analysts' forecasts."
Vivendi, whose businesses include the world's largest music company Universal Music, won French government approval last month to file under a new tax regime that will allow it to accelerate the use of past net losses and save €3.8 billion over the next 6 to 7 years.
It said today the new regime would save it €981 million in tax payments this year, which would include a one-off tax refund of €463 million. It predicted the accounting change would help it save about 500 million annually in tax charges over the next few years.