French telecoms and entertainment group Vivendi today posted a record net profit on growth in Brazil and video game sales, but it still gave a weak outlook for 2012-13.
The company posted an adjusted net profit gain of 9.4% to €2.9 billion, "the highest adjusted net income in Vivendi's history," chief executive Jean-Bernard Levy said.
He was cautious regarding results for 2012 however, warning of stronger competition in France and Morocco.
"In France in particular, the excessively favourable conditions granted to the new mobile operator by the regulator, the state and the incumbent operator, lead SFR to reconsider very carefully its commercial offers and its cost base," Levy said.
He referred to Vivendi's mobile telephone operator SFR. Vivendi sales were stable last year, increasing 0.5% to €28.8 billion and the group's operating profit rose 3.3% to €5.6 billion.
SFR was hit by a new value-added-tax and price cuts imposed by regulators in France that cut sales 3.1% to €12.18 billion. This year and next the group forecast "increased pressure" on earnings at its telecoms unit, but added that other activities should "help lessen the impact."
That included operations in Brazil and the success of Vivendi's video game business, which produces Call of Duty, Modern Warfare and World of Warcraft.
In 2014, Vivendi expects profit to begin to grow again owing to stronger positions in emerging countries, innovations in progress and savings from acquisitions made in 2010 and 2011.
