By Andrea Figueras
Shares in Television Francaise 1 (TF1) skyrocketed on Friday as the company expressed optimism about a rebound in advertising revenue in the second half of the year. The growth is anticipated to be driven by the highly anticipated Rugby World Cup.
As of 1214 GMT, TF1 shares were up by an impressive 9.2% at EUR7.20.
TF1, the French television network controlled by Bouygues, believes that the advertising market will gradually return to its previous year’s levels during the second half. Additionally, the broadcast of the Rugby World Cup is expected to significantly boost ad revenue within TF1’s media operating segment.
In a note to clients, Citi analysts Thomas Singlehurst and Praveen Shetty stated that the event would specifically enhance TF1’s ad revenue during Q3. Furthermore, they mentioned how TF1’s positive outlook signals a potential alleviation of pressures on ad revenue faced by European broadcasters in recent quarters.
The analysts acknowledged that TF1’s first-half results were in line with or slightly better than expectations. However, it is the company’s confident outlook for advertising that truly catches the attention of investors.
During Q2, TF1 experienced a decline in consolidated revenue, dropping from EUR625.6 million to 558.4 million euros ($609.1 million). This decrease was primarily attributed to a 7.5% decline in media advertising revenue. TF1 stated that advertisers across numerous sectors tightened their budgets due to inflation.
Net profit for TF1 in the second quarter amounted to EUR73.3 million, a decrease from EUR92.4 million in the same period of the previous year.