VU Games posts major first half loss

The financial performance of Vivendi Universal Games continued to decline through the first half of 2004, according to the latest figures released by its giant parent company, with losses of 156 million Euro recorded for the period.

That loss is a major decline in performance over the 52 million Euro loss recorded in the same period of 2003, although some 90 million Euro of it can be accounted for by restructuring costs incurred by the division's turnaround plan.

Those costs came from a variety of measures, including the cancellation and hence write-offs of certain projects in development and the reduction of the division's headcount in North America by around 40 per cent.

This new turnaround plan, which is largely focused on reducing VU Games' operating costs, was put in place when a new management team was appointed in January, and sweeping changes have been made to the company since then.

However, Vivendi Universal has given no guidance about when its games division might return to profitability. The parent company itself continues to struggle to climb out of debt - reducing its net debt from 11.6 billion Euro at the end of 2003 to 6.4 billion Euro at the end of June, while group operating income was also seen to rise 30 per cent on a comparable basis during the first half.