'X Factor' co-producer FremantleMedia suffers profits drop

The X Factor co-producer FremantleMedia endured a 20% year-on-year fall in profits in the first half of 2011, as ITV's axing of The Bill and other issues hit the company's performance.

Fremantle, which is owned by European broadcasting giant RTL, today reported that its earnings before interest, tax and amortisation during the six-month period declined from €90m to €72m.

The production division, which generates around 13% of RTL's profits, said that the fall was "mainly due to general pressure on margins and volumes from broadcasters".

Fremantle has suffered recently due to ITV's decision to cancel cop drama The Bill after 27 years on air last autumn, along with the end of Australian productions of Biggest Loser and So You Think You Can Dance.

The firm's Talkback Thames production outfit parted company with its chief executive Lorraine Heggessey last year and also cut 20% of its workforce.

RTL said that its first half performance was also impacted by "lower distribution income" from the FremantleMedia Enterprises division, which makes games and digital spinoffs.

FremantleMedia actually increased its revenues by 4.2% year-on-year to €621m in the first half of 2011, which RTL said was "driven by higher revenue in North America" following the acquisitions of documentary producer Radical Media and TV games maker Ludia.

Overall, RTL's total reported revenues were up 3.4% to €2.75bn for the six-month period, delivering a 3.7% growth in pre-tax profits to €557m.

RTL Group chief executive Gerhard Zeiler said: "These strong half-year results confirm our strategy of continuous development of our core business.

"Maintaining the strong audience popularity of our channels and programmes is essential to outperforming the competition in the advertising markets long-term."

He added: "Despite the current insecurities of the global economy and the strong comparatives of the fourth quarter of 2010, we remain cautiously optimistic for the full year."