The Board of Directors approved the agreement signed with the KirchGroup this summer
CLT-UFA Luxembourg, September 10, 1997
The Board of Directors of CLT-UFA S.A. met today at CLT-UFA Group headquarters in Luxembourg.
The Board of Directors approved the agreement signed with the KirchGroup this summer. Under the terms of the agreement, CLT-UFA and the KirchGroup will both own 50% of Premiere, Germany‚s leading Pay TV-channel, which will be developed as the digital Pay TV-platform in Germany. The other digital Pay TV- offer DF1 will be discontinued as a stand alone company and its activities will be integrated into the new venture under the roof of Premiere. Under the terms of the agreement, Germany will have Europe‚s only open and non-discriminatory standard for digital television. The agreement is subject to the approval of relevant national media authorities and the European Commission.
The link-up between CLT-UFA and the KirchGroup represents a major step in CLT-UFA's strategy to become a leading player in the fast-moving market of digital television. The investment in Premiere's digital development is also in line with CLT-UFA's commitment to future growth within its primary markets.
Considerable investments will be committed by the group to strengthen the company‚s position in the new emerging market. The financial efforts will decrease the profitability of CLT-UFA in the middle term, while strengthening its potential for future growth and earnings in the long term. This decision underscores the group‚s role as Europe‚s leading television enterprise, competing successfully on a global scale.
The Board of Directors also authorized the management to finalize the terms of an agreement with Havas concerning the acquisition of Havas Intermediation, a French company holding stakes in European advertising sales companies whose main activity is the sale of airtime for CLT-UFA group channels.
At the same time, the Board of Directors reviewed unaudited consolidated accounts to June 30, 1997. CLT-UFA Group revenues for the first half of 1997 total LUF 55.3 billion, compared with LUF 45.8 billion on June 30, 1996, a rise of 21% (4% at constant scope of consolidation). Consolidated net profit for the same period was LUF 487 million, compared with LUF 2,199 million in the first half of 1996.
The decrease in profit is mainly due to start-up losses of new projects and development costs, including Channel 5 in the UK, TPS in France and RTL7 in Poland, which amounted to - LUF 1,718 million on June 30, 1997, compared with - LUF 576 million on June 30, 1996. The 1997 figures also reflect extraordinary items in an amount of - LUF 246 million compared with
+ LUF 794 million for the same period last year.
CLT-UFA holds shares in 44 radio and TV stations throughout Europe, most of them market leaders (e.g., RTL in France, RTL Television in Germany, RTL TVi in Belgium, HMG in the Netherlands,...).