As predicted by CMU yesterday (OK, so anyone who can count was predicting it too), the Universal Music Group have announced mega profits for last year. The company yesterday reported a
2004 income of $461 million on a revenue of $6.695 billion, with the company's annual EBITDA (earnings before interest, taxes, depreciation and amortisation) exceeding a billion dollars, the first music company to ever achieve this.
That news has helped boost the fortunes of Universal's parent company Vivendi, which has been suffering ever since it went into near financial meltdown back in 2002. The group achieved a net income of $1 billion, which is quite a turnaround given that they made a loss of $1.5 billion in 2003. The group's CEO,
Jean-Rene Fourtou, said yesterday: "For the first time in four years, the company announces positive net income. **Vivendi
Universal** has seen a turnaround and is in a solid and profitable position in its development."
Some in the US are wondering what impact Universal's financials will have on rival label Warner Music with regard their plans to plough ahead with a flotation. On one level Universal is so outshining its competitors in the music industry that some say it makes investing in Warners less attractive. However others say Universal's good fortune suggests the music business is in a period of recovery, and that that would make buying shares in a company like Warner Music a more attractive opportunity.