EMI, the third largest record company in the world, is expecting to post pretax profits of around 9 per cent as revenues increased from higher sales and cost savings were managed following a restructuring programme.
According to a statement released by the company to the press, ''Revenue growth has been delivered against a backdrop of a weaker-than-expected recorded music market''.At 0709 GMT, shares climbed by 1.7 percent to 228 pence on Monday.
The revenues came through higher sales of albums recorded by artists such as Coldplay, Gorillaz, the Rolling Stones, Paul McCartney and Keith Urban.
On the whole, the company total profit before tax, amortization and exceptional items is expected to grow by 9 per cent. The EMI Music division was expected to post 4.5 percent increase in first-half revenues. It was expected that operating margins would increase by about one percentage point.
Earlier, EMI shares had declined by 15 percent this year which included a 7.5 percent fall in the past two weeks on fears that digital download sales in the world's largest music market, the U.S., had reached a plateau. CD sales haven’t shown signs of improving, therefore music industry is banking on digital sales to help it stem the five-year revenue slide.
Global music sales showed a decline of 1.9 percent in the first half of this year incurring losses of up to 7.5 billion pounds. 6.3 % fall of physical sales were not offset by exponential increase of digital sales.
According to a poll of 13 brokerages by Reuters Estimates, EMI was expected post 17% increase in pretax profits amounting to 165.8 million pounds.
These results have, however, raised the expectations of EMI to deliver full-year results as per forecasts. The company affirmed by saying it was “on track” to do so.
Posted
on : Mon, 17 Oct 2005 15:15 GMT | Business News
By : Salim Patel
|
