German media firm Bertelsmann Friday reported a 31 percent increase in profit for the first half of the year, backed by strong performance at the Random House book publishing group, significantly lower items as well as a much reduced impact from discontinued operations. The company issued a cautious outlook.
Bertelsmann's CEO Thomas Rabe said, "...developments during the first half were positive overall. I am particularly pleased that Bertelsmann is growing significantly, and mainly organically."
The company's core divisions include television (RTL Group), book publishing (Random House), magazine publishing (Gruner + Jahr) and outsourcing services (Arvato).
Group profit for the period climbed to 353 million euros from 269 million euros in the prior year period.
The results included negative earnings from discontinued operations of just 1 million euros compared to such earnings of 106 million euros last year. Special items totaled 19 million euros, while they were 60 million euros last year.
Earnings before interest and tax, or EBIT, climbed to 712 million euros from 679 million euros. Operating EBIT from continuing operations was 731 million euros in comparison with 739 million euros last year.
Group revenues from continuing operations grew 5 percent to 7.57 billion euros from 7.21 billion euros with contribution from almost all divisions. Excluding portfolio and currency effects, revenue growth was 3.7 percent.
RTL Group benefited from brisk business in Germany, and improved revenues to 2.82 billion euros from 2.75 billion euros.
Trade publishing group Random House was helped by rising e-book revenues as well as bestsellers like the record-breaking "Fifty Shades" trilogy. The business generated 947 million euros, up 20 percent from the prior year.
The magazine publisher Gruner + Jahr kept revenues stable at 1.11 billion euros even as there was a substantial decline in the ad sales markets. The division also expanded in digital marketing.
Arvato increased revenues to 2.1 billion euros from 2.0 billion euros with growth in Arvato Infoscore's integrated financial services based around risk management and collection, the BPO services in the European core markets, the international supply chain management business in the IT/high-tech segment and service businesses in China.
Looking ahead, Rabe said, "For the current year we continue to expect moderate revenue growth, a continued high operating EBIT, and a year-on-year increase in net profit. However, the subdued economic prospects and the euro crisis, whose repercussions are challenging to gauge, making it difficult to predict future developments at this time."
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