RTL reports record high with '98 profits

Pretax profits up 40%, revs hit $1.93 bil

BERLIN -- In shape for a possible public listing, Europe's largest advertising carrier, commercial broadcaster RTL, reported record profits Thursday for 1998 and projected further increases for this year.

Pretax profits for the past fiscal year were up by almost 40%, reaching DM291 million ($155 million). Gross revenues were at $1.93 billion, up minimally from the previous year's $1.86 billion, reflecting a slowdown in the local ad market.

Presenting his first annual report as head of RTL, Gerhard Zeiler emphasized that future revenues will be boosted by sideline businesses such as the Internet, merchandising and licensing.

"Through the expansion of the RTL brand onto related media and free-time activities, we plan to make use of the strength of the brand beyond free TV," Zeiler said. "RTL has the potential to establish itself as the leading private station in Europe and as the No. 1 brand for entertainment in Germany."

Closer cooperation between the RTL stations is planned to improve economic prospects.

Investments in programming was at a record high of $850 million, with the lion's share, 72%, invested in commissioned and inhouse programming as opposed to acquired wares. This trend of investing in local product, considered a key component to RTL's success, is continuing in 1999.

"The basis for our success is our innovative and creative strengths and our willingness to take risks," Zeiler said, committing an additional $53 million to the programming budget for 1999.

Zeiler, who described RTL as fit to hit the stock exchange, said he had been asked by shareholder CLT/Ufa to prepare the station for a possible flotation, but said there were no concrete plans.