Universal Music Group Reports 21% Base Profit Increase in Third Quarter

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The Universal Music Group (UMG) logo is seen in a building in Zurich, Switzerland on July 20, 2021. REUTERS / Arnd Wiegmann / File Photo

AMSTERDAM, Oct.27 (Reuters) – Universal Music Group NV (UMG) (UMG.AS), the label behind many of the music industry’s biggest stars, on Wednesday announced a 21% increase in base profits to third quarter at 461 million euros ($ 535 million), in line with the company’s forecast.

UMG’s current result before interest, taxes and depreciation (EBITDA) compared to 382 million euros in the same period a year ago.

This is the first time that the company behind stars such as Lady Gaga and Taylor Swift has published its results as an independent state-owned company after its split from former parent company Vivendi in September in the largest European listing of the ‘year. Read more

“Our results this quarter demonstrate the continued strength of our artist roster and catalog, our company’s increasingly diverse revenue streams and our ability to generate growth for our shareholders,” said the CFO. Boyd Muir in a statement.

Revenue rose 16% to 2.15 billion euros, the company said, citing growth in recording, publishing and merchandising.

It forecasts a growth of more than 10% in revenue for the year 2021 and adjusted EBITDA of more than 20%.

Shares of Universal surged on their first day of listing, rising at one point by more than 30% from the benchmark price of 18.50 euros. Read more

They have since traded sideways, closing Wednesday at 25,135 euros.

UMG is betting that the streaming boom spearheaded by Spotify (SPOT.N), which has fueled royalty revenue and profit growth for several years, still has a long way to go in a music industry it dominates with Warner ( WMG.O) and Sony Music (6758.T).

Earlier on Wednesday, Spotify reported better-than-expected growth in subscriber numbers in the third quarter. Read more

($ 1 = 0.8624 euros)

Reporting by Toby Sterling Editing by Mark Potter, Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.


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