MILAN (Reuters) - Mediaset expects an advertising recovery which helped Italy’s top commercial broadcaster swing back to profit in the third-quarter will mean net and operating profits this year.
Shares in Mediaset, which is controlled by the family of former Prime Minister Silvio Berlusconi, rose as much as 8% on Wednesday after its third quarter earnings exceeded forecasts.
As Italy introduces new restrictions to curb a COVID-19 resurgence, Mediaset said it expected the recovery trend to continue despite uncertainty for the final part of the year.
The company said it would take action to lower its cost base to offset any additional slowdown in the advertising market after reducing costs by 11% so far this year.
“The third quarter was better than expectations thanks to the positive trend in revenues with advertising in Italy growing 4.6%,” Milan-based broker Equita said in a note, adding that October advertising revenues were also positive.
Mediaset said its net profit in the three months through September rose to 29.4 million euros ($35 million), from a net loss of 10.6 million euros a year earlier.
Domestic revenues, which account for more than two thirds of Mediaset’s total, rose 4.1% in the quarter from the previous year, although group sales fell 12.7% in the first nine months.
Mediaset CFO Marco Giordani told analysts that the company still expected Europe’s TV sector to consolidate and it would remain a long-term investor in Germany’s ProSiebenSat.1, of which it holds nearly 25%.
Giordani did not update on an ongoing legal row with Vivendi, Mediaset’s second-biggest shareholder, which has forced the group to shelve plans to merge its domestic and Spanish businesses to pursue tie-ups in Europe.
Although Mediaset and Vivendi, at loggerheads since 2016 over a failed pay-TV deal, have resumed contact, sources close to the matter have said that no resolution is yet in sight.
($1 = 0.8467 euros)
Reporting by Elvira Pollina; Writing by Stephen Jewkes; Editing by Valentina Za and Alexander Smith
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