MILAN (Reuters) -MediaForEurope (MFE) is aiming for a 2023 profit at both the net and operating level despite a stagnating advertising market, after income plunged 40% last year, Italy’s largest private broadcaster said on Wednesday.
MFE, which is owned by the family of former Prime Minister Silvio Berlusconi, has been the subject of speculation about its future with its 86-year-old founder now in hospital and only recently out of intensive care.
MFE said advertising sales in its key domestic market in the first quarter of 2023 were broadly in line with the same period of 2022, which was the best quarter of the year.
In Spain, where the group also operates, advertising sales improved in March and April after a tough start to the year.
The company said its outlook was challenging.
“Despite the slow but progressive normalisation of energy prices, high ‘core’ inflation and the decision of central banks (in particular the ECB) to continue to raise interest rates, are contributing to ongoing weakness in demand both in Italy and in Spain,” it said.
Finance Chief Marco Giordani told analysts higher rates would add 10 million euros to debt costs in 2023.
MFE, which has long called for consolidation in Europe among traditional broadcasters to fend off competition from digital newcomers, has become the single biggest investor in German rival ProSiebenSat.1.
MFE said it remained committed to “investments linked to the stake in ProsiebenSat1, a company in which MFE confirms its role as a long-term shareholder”. Giordani said investments in 2023 would be flat year-on-year.
Operating profit was 337.2 million euros ($369 million) in 2023, down from 555.4 million euros a year before, while revenue fell 4% to 2.8 billion euros
($1 = 0.9132 euros)
(Reporting by Valentina Za; Editing Edmund Blair, Kirsten Donovan)