TF1 profits dive in 1st half

French broadcaster's earnings fall 32.7%

By DAVID HAYHURST

PARIS -- TF1, France's leading private broadcaster, saw profits slump 32.7% to e125 million ($195 million) in the first half of 2008 as a poor economic climate and programming costs from the European Cup soccer tournament took a toll on earnings.

The TF1 Group's consolidated first-half revenues fell 4.7% to $2.13 billion. Net advertising revenue from core channel TF1 was down 3.6% at $1.39 billion, while revenue from other activities dropped 6.6% to $737 million. TF1 paid $85 million for national broadcasting rights for the majority of the Euro 2008 soccer matches, in which France made a surprisingly early exit.

Earnings were also affected by uncertainty among advertisers -- described in the group's interim report as a "wait and see attitude" -- largely created by reforms in the funding structure for French pubcasters.

Audience share for the TF1 channel is also coming under increasing pressure from the continued growth in free digital terrestrial TV channels.

Revenues for TF1's theme channels were up 1.2% on the year to $150.1 million. The division's overall advertising growth was largely driven by the continuing strong performance of digital terrestrial television network TMC, 40% owned by TF1. TMC has seen its average monthly audience share double to around 2% in the past year.

"The TF1 Group is reiterating its 2008 full-year guidance of a decline of around 3% in consolidated revenue and of growth in programming costs of less than 3%," it said in a statement.

TF1 shares closed down 4.2% at $17.25. Share value has fallen some 40% since the start of 2008 compared with a 20% drop at M6, TF1's biggest private net rival.