| Fourtou: The going gets tough (Reuters)
Paris, March 7: Vivendi Universal reported on Thursday a record loss of more than $ 25 billion for 2002, largely as a result of huge write-offs on investments made in the heady years of the 1990s.
Vivendi’s board gave the chairman, Jean-Rene Fourtou, the green light to explore the sale or tie-up of its American entertainment assets.
Vivendi’s loss of 23.3 billion euros — more than expected and almost double the company’s 2001 loss of 13.6 billion euros — was the largest corporate loss in French history, breaking a record of $ 23 billion set on Wednesday by France Telecom.
Vivendi narrowly escaped a liquidity crisis last year. On Thursday, however, the company said that it expected to return to profitability, before exceptional items, by 2003, and reaffirmed its pledge to shed assets worth 7 billion euros this year.
The results were announced after a much-anticipated meeting of the company's board. While the entertainment businesses were discussed, senior managers gave no hints on their future at a news conference.
Fourtou said that Vivendi was examining the possible options for the entertainment assets, which include Universal’s film and music businesses, its cable channels and television production businesses. He said that Vivendi had been approached by several potential partners.
He said Vivendi planned to shed assets this year worth 7 billion euros, continuing an effort to reduce a mountain of debt built by his predecessor, Jean-Marie Messier, who transformed Vivendi through acquisitions from a water utility into a media and telecommunications giant.
Asset sales last year, Fourtou said, including the sale of the publisher Houghton Mifflin and most of Vivendi’s stake in the water and waste group Vivendi Environnement, enabled the company to cut its net debt to 12.3 billion euros by the end of the year, from 37.1 billion euros a year earlier.
Vivendi’s loss reflected goodwill charges of 18.4 billion euros and another charge mirroring the depreciation of portfolio investments totalling 2.9 billion euros. Excluding one-time items and goodwill, Vivendi lost 94 million euros.
“Last year was an extremely difficult year,” Fourtou said at a news conference after the directors’ meeting, but 2003 promised to be a “year of transition and of financial and economic progress.”