Premiere suffers record loss in 2008

German pay-TV operator Premiere shocked the stock market on Monday after posting a record loss of €269.4 million for 2008. The share value, which was once as high as €32, dropped a further 17% to €2.31.

In 2007, the Munich-based broadcaster recorded a loss of €51.6 million. For 2008, EBITDA dropped from a plus of €83.6 million in 2007 to minus €57 million. The company’s turnover rose slightly from €937.2 million to €941.1 million.

Figures for the fourth quarter of 2008 were also gloomy. Net loss rose in comparison to the previous year’s final quarter from €23.5 million to €114.3 million, while EBITDA slipped from a plus of €13.5 million to minus €44.5 million. Turnover dropped from €261.3 million to €236.1 million. The number of direct subscribers sank from 2.53 million in 2007 to 2.39 million in 2008, while indirect customers, for example those subscribing through cable operator Unitymedia’s satellite platform arenaSAT, fell from 790,000 to 691,000.

“2008 was a very difficult year, during which we suffered a large financial loss and a liquidity crisis which threatened the company’s existence”, said CEO Mark Williams. “The long-term financing structure agreed in December 2008 with News Corp and our bank syndicate was key to our survival. The most critical step now is the approval of the required capital increase by shareholders at the extraordinary general meeting on February 26 and the completion of the rights issue expected during the first half 2009. For the first half of this year we are focused on developing detailed operational plans for an aggressive push in the second half.”

Williams also confirmed that the broadcaster is considering changes to its brand names during the planned relaunch. He didn't reveal whether this could lead to the broadcaster adopting the "Sky" brand now News Corp is the platform’s major shareholder. But there is speculation in the industry about possible names including "Sky Premiere", "Premiere Sky" or "Sky Germany".

Premiere does not expect subscription figure growth until the re-launch and marketing initiatives scheduled for the third quarter. It anticipates remaining in the red for 2009 and 2010, with the profit zone being reached only in 2011.