Bertelsmann, which has a 53% stake in Penguin Random House, has reported 7% rise in group profit in its first quarter to almost €200m.
Revenues for the first quarter remained stable at €3.94bn (2016: €3.95bn) and operating EBITDA stood at €482m (Q1 2016: €500m) as the fiscal year gets underway.
The company noted the results were in spite of a comparison with last year's first quarter that, unlike this year, had contained the "ad sales-intensive" Easter period. Its RTL Group also had to cope with a loss of income caused by the discontinuation of the “American Idol” talent show in the US. It said start-up losses for digital and new businesses were also incurred.
Nonetheless, group profit rose to €198m from €185m in the first quarter and it aims to reach group profit in excess of a billion euros by the end of the year.
Of Penguin Random House, the company said it had recorded "a strong bestseller performance" and highlighted the group's world publishing deal for books by Barack Obama and Michelle Obama. Bertelsmann is currently in active negotiations with Pearson after the company announced its intentions to sell its 47% stake in PRH in January.
Financial breakdowns for divisions in each of the groups are not be available until Bertelsmann releases its mid-year results, but it revealed Gruner + Jahr increased digital revenues by 38% in Germany to €43m (Q1 2016: €31m) and both its music division BMG and the Bertelsmann Education Group saw double-digit growth. In the US, it also remarked on Fremantle Media's success with the fantasy series “American Gods”, the US TV adaptation of Neil Gaiman's books published by Headline, which premiered at the end of April. Gaiman executive produced the series with FreemantleMedia.
Thomas Rabe, chairman and c.e.o. of Bertelsmann, said: “We’ve had a very successful start to the year, with Bertelsmann's second-highest operating result ever and much higher group profit. This demonstrates that we are on the right path with the implementation of our strategy and our new corporate structure. We are confident of achieving our goals for the full year 2017.”
Bertelsmann c.f.o. Bernd Hirsch said: “Bertelsmann is in a solid financial position; among other things, our equity has increased to over ten billion euros. For the full year, we are sticking to our goal of higher revenues, continued high operating profitability, and group profit of over a billion euros.”