Riding on its robust sales growth in Brazil and in the broadband and video games segment, Europe’s biggest telecom and entertainment group Vivendi has managed to beat street forecasts on 2010 profits.
The company owns Universal Music Group and video games company Activision Blizzard along with French pay TV Canal+ and telecom company SFR.
Net profit for the year was up 4.4 percent to €2.7 billion (£2.3 billion, $3.7 billion). The company had ended the year on a high and net earning in the fourth quarter of 2010 was up by 2.3% to €484 million.
Vivendi said it expects profit growth in 2011 to come from emerging markets such as Brazil and Morocco. Its Brazilian telecom subsidiary GVT’s revenue is expected to grow by a scorching 35-40% in 2011 alone.
However, its other businesses in matured markets are facing pricing pressures. Its French telecom subsidiary SFR, which it co-owns with British operator Vodafone, has been challenged by rivals Bouygues and France Telecom.
Falling sales of compact discs have hit the profitability of music company Universal and the company is expected to cut costs by €100 million to improve performance.
Vivendi is also engaged in a class action law suit in US over its financial disclosures to shareholders and has made provisions of €100 million for the same. A French court had penalized its ex and present senior employees for insider trading.