Vivendi Games records major loss in "transition" year

Media conglomerate Vivendi Universal has announced its full year financial results, revealing that while the group as a whole moved into operating profit, the troubled games division reported a major loss.

VU Games reported a full year operating loss of â'¬201 million on revenues of â'¬571 million, as compared with its 2002 figures, which showed an operating profit of â'¬63 million on revenues of â'¬794 million.

Although the company described 2003 as a "transition year" for the games division, pointing out that the majority of key titles were released late in the year, the fourth quarter results showed little evidence of a recovery - with a massive operating loss of â'¬91 million on revenues which dropped from â'¬292 million last year to â'¬254 million this year.

However, the division hopes to improve on its profitability situation next year, although turnover is expected to fall once again - implying that VUG plans to scale back its operations in order to try and return to the black.

The picture at the Games division is in contrast with the results posted by Vivendi Universal as a whole, with the group showing strong signs of recovering from the difficulties of the past two years. The company moved into operating profit (although a net loss was still recorded, and was in fact worse than expected) and is managing its debt effectively, with the â'¬11.6 billion deficit at the end of 2003 expected to be reduced to below â'¬5 billion this year.

The company took the opportunity presented by its announcement of the financial results to deny rumours that it plans to split in two, as well as quashing speculation that it intends to sell off its telecommunications businesses.