Universal Music Earnings Decline Due To EMI Acquisition Costs, But Sales Increase
The Universal Music Group suffered a decline in earnings in the first half of 2013 due to costs related to its acquisition of EMI Recorded Music and the subsequent restructuring to produce synergistic cost savings. But its topline enjoyed a nice increase in sales so far this year, thanks to revenues generated by the EMI catalog.
In the first half of the year, sales increased 16.3% to 2.24 billion euros (about $3 billion) from 1.92 billion euros ($2.5 billion) in the first half of 2012, while its earnings before interest, taxes, depreciation and amortization fell to 143 million euros ($189 million) from 156 million euros ($206 million), an 8.3% drop
In its most recent fiscal quarter, UMG produced 88 million euros ($116 million) in earnings before interest, taxes depreciation and amortization, the same amount it had in the second quarter of last year. But sales jumped 19.1% to 1.15 billion euros ($1.52 billion) from 961 million euros ($1.27 billion).
The company pointed out that 2013 marks the first time where digital sales are more than half of total recorded music sales. To be exact, digital sales comprised 53% of total sales, while last year at the mid-year point, the digital format accounted for 47% of sales.
The company said revenues were buoyed by carryover sales from Rihanna and Imagine Dragons, the ‘Les Misérables’ soundtrack and the acoustic album ‘Believe’ from Justin Bieber. The company looks to have a strong second half with two of its biggest guns, Eminem and Lady Gaga, expected to release albums.
Source: Billboard
