Five shines as RTL revenues rise

The European broadcasting group RTL has reported a 7% increase in revenue in the first quarter of the year, its first upswing since 2008, helped by positive results from its UK subsidiary Channel Five. Five is understood to have outperformed the 7% year-on-year increase seen in UK TV advertising generally during the first three months of 2010. RTL, which also owns the X Factor producer FremantleMedia, reported a 7.2% year-on-year increase in underlying revenue to €1.3bn (£1.1bn) in the first three months of 2010 as TV advertising recovered in most of the markets in which it operates in Western Europe. It is the first year-on-year revenue growth the company has seen since reporting a 3.2% increase in the last quarter of 2008. Reported earnings before interest, tax and amortisation, which excludes factors such as goodwill impairment charges, surged by 126% year on year in the first quarter to €197m. The results will be a fillip for Five, which reported a decline in revenue of more than 20% last year and has been linked in the past couple of months to possible commercial partnerships – including full merger – with ITV and Channel 4. Five's earnings before interest, tax and amortisation are understood to have shown a "significant improvement" over the first quarter of 2009. Overall Channel Five group reported an operating loss before interest, tax and amortisation of €10m last year . RTL said today that "startup losses", primarily for the UK digital channels Fiver and Five USA as well as Alpha Media in Greece, stood at €10m for the first quarter. This is a significant improvement over the €18m in start up losses racked up in the first quarter last year. "Compared to a weak first quarter in 2009, most of the Western European TV advertising markets recorded robust growth during the first quarter with Germany, France and the UK showing the best development," said RTL in an interim management statement today. "Thanks to improved results from all broadcasting activities... reported group ebita more than doubled." RTL said that it expects 2010 to be better than last year, which saw total underlying group revenue fall 7.5%, ebita drop 17.6% and net profits of €205m, but remained cautious as the outlook for ad markets remained short term. "Given the positive business development in the first months of 2010, RTL Group expects to improve on last year's results," the company said. "However, developments on the various advertising markets can only be predicted to a very limited degree. At the moment, no one can tell what the fourth quarter will look like this year, given the low visibility and economic environment." • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".