Recorded music problems hit EMI's profits
Music giant EMI announced sharply lower profits today after a painful year at the recorded music division, which produces recordings by stars such as Kylie Minogue and Robbie Williams.
The entire group’s full-year profits before tax and exceptional items in the 12 months to March 31 slumped to £153.3m (€243m) from £259.5m (€411.3m) a year earlier.
The figures reflect a tough period for the company’s recorded music division, particularly in Japan and Latin America.
But EMI chairman Eric Nicoli said a strategic review announced in March was on track and would address the problems.
The restructuring plan saw EMI cut about 1,800 jobs - one fifth of the recorded music division’s workforce - and reduce its number of artists to 1,200.
Long term, EMI also pledged to increase revenues through Internet and broadband technology, tackle piracy and build a stronger DVD business.
Mr Nicoli said: ‘‘The recovery is well under way and this is already a fundamentally different company to the one that reported results last year.’’
The restructuring is being masterminded by former Polygram president and new chairman of the recorded music division Alain Levy.
He has said that the company has suffered because of the economic downturn, outdated music industry practices and the impact of piracy.
Mr Levy said today that there had been recent signs of an improvement in the Latin American and Asian markets, although the US business suffered from a poor first quarter because of a weak release schedule.
EMI’s UK operation had continued the strong performance seen in the last financial year with further growth in the current quarter.
Mr Levy said: ‘‘I am feeling very positive about the potential of EMI. If we continue to break artists worldwide our numbers will go up.’’
The full-year figures from EMI are in line with projections issued by the company on the day that its restructuring plan was announced.
Turnover fell to £2.44bn (€3.87bn) from £2.67bn (€4.23bn) a year earlier, with only the UK division increasing sales during the period.
Operating profits from the recorded music division slumped 63% to £83.1m (€131.7).
