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Domestic advertising sales lift Mediaset’s Q1 operating profit

Domestic advertising sales lift Mediaset's Q1 operating profit

MILAN (Reuters) -Italy’s top commercial broadcaster Mediaset on Wednesday posted a 63% rise in first-quarter operating profit following lower costs and a rebound in domestic advertising sales from last year’s pandemic-driven slump.

The broadcaster controlled by the family of former Prime Minister Silvio Berlusconi reported a first-quarter group operating profit of 67.9 million euros ($82.40 million) compared with 41.6 million euros last year.

In common with other traditional broadcasters across Europe, Mediaset faces growing competition from streaming services, such as Netflix, and from web giants including Google.

The Milan-based group has said it wants to pursue alliances with European peers to fend off the threat and expects a rebound in advertising over the coming months to strengthen its results, including cash generation, this year.

Domestic advertising revenue rose 6% to 453.5 million euros while total advertising sales, including Mediaset’s Spanish unit fell to 625 million euros from 630 million euros a year ago. Total operating costs fell 11.6% to 566.3 million euros, the broadcaster said.

In 2019, before the pandemic, the group reported Q1 television advertising revenue of 707.3 million euros.

Mediaset shares rose 0.37% by 0715 GMT, broadly in line with Italy’s all-share index.

To secure backing from its second-biggest investor Vivendi for pan-European expansion plans, Mediaset last week sealed a landmark accord with the French group, ending a five-year legal battle.

($1 = 0.8241 euros)

(Reporting by Elvira Pollina; editing by Barbara Lewis)

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