Germany’s ProSiebenSat.1 Sprouts Green Shoots Amid Coronavirus Decline

German media operator ProSiebenSat.1 noted some bright spots amid the general coronavirus-induced gloom as it revealed its financial results for the second quarter of 2020.

The group’s total video view time — the number of minutes viewed across the group’s linear channels and digital entertainment platforms — grew by 3.4% in the first half of the year, driven by high prime time numbers for “Promis unter Palmen” and “The Masked Singer.”

Subsidiary technology company NuCom showed a revenue growth of 5%. And, compared to the last quarter, decline in advertising fell by a percentile point from 26% to 25%.

Elsewhere, the pandemic took its toll. Group revenues decreased by 25% to €709 million ($843 million); adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) plummeted from €213 million ($253.2 million) to €23 million ($27.3 million; and adjusted net income fell from €85 million ($101 million) to €52 million ($61.8 million).

Governmental COVID-19 restrictions impacted the group’s Red Arrow Studios, with external revenues in the first half of the year declining by 17% to €236 million ($280.6 million) year-on-year, compared to 2019.

The group noted that digital studio Studio71 was “developing stably.”

ProSiebenSat.1 said it continues to focus on “its core strategic projects” of becoming “a leading entertainment and infotainment player” in Germany, Austria and Switzerland. Local and digital
offerings, in association with Red Arrow Studios and Studio71, will also be key to monetization and in reducing dependence on TV advertising revenues.

Rainer Beaujean, chairman of the executive board and chief financial officer of ProSiebenSat.1 Media SE, said: “In our core markets of Germany, Austria and Switzerland, the economic environment is beginning to brighten, so we are seeing the first upward trend also in the advertising market as of July. We expect a decline of slightly less than 20% in July advertising revenues compared to the previous year and thus a clearly lower decline than in the past quarter.

“There are also signs of a further improvement in August with a minus of around 10% currently. At the same time, we continue to focus on our consequent cost and cash management and are looking more optimistically into autumn,” continued Beaujean. “Although it will not be possible to make up for the declines resulting from COVID-19 by then, the months from September to December will be decisive for the group’s business performance in the full-year. In the past, ProSiebenSat.1 has generated around 50% of its adjusted EBITDA in this period.”

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