Time For The Painful Figures - Part 2

Since my last blog, things have moved on a bit.

Avid has posted it's results or lack of them with a $32 million loss. Avid generated revenue of $206.7 million in the fourth quarter, which was down 20% from a year ago. For the full year, Avid posted a $129.8 loss on $844.9 million in revenue compared with $4.9 million loss on $929.6 million of revenue in 2007.

Avid's restructuring with 20% headcount reduction in October was also embellished by a $13.3 million income from the sale of Softimage business to Autodesk. Avid also took a $9.6 million charge on its poorly performing Pinnacle consumer video business.

Reuters have said that Thomson SA had warned it was likely to breach certain debt covenants and needed to bolster its balance sheet, notably by selling more non-core activities, sending its shares down around 20 percent on Thursday. These asset disposals were indicated to be it's Grass Valley and PRN business units.

The loss-making group said it would sell businesses which had contributed around €1.0 billion ($1.3 billion) to 2008 sales. Once disposed of , Thomson would in the future focus on providing services to media content creators, presumably through its Technicolor businesses.

Chief Financial Officer Stephane Rougeot told a conference call with analysts that, once completed, the asset sales plan would cut annual revenue to "slightly below" 4 billion euros.

Previously, Thomson undertook to restructure or sell unprofitable business in order to raise profits, which increases cash and reduces debt, all in line with requests from investors including a simplification of the company's structure and a disposal of loss making units. As of 4th February, Thomson's share price was at $1.36 but analysts suggest it may fall as low as 80 cents.

Panasonic have announced a world-wide workforce reduction of 15,000 with a possible closure of up to 27 factories. The confirmation of where the cuts will fall is yet to be disclosed.

www.reuters.com

Time For The Painful Figures

Today,  Sony announced that for the tax-year ending on the 31st of  March,  they expected to report a loss of 150bn Yen,  the first in 14 years. 

This announcement came in a revision of it's consolidated forecast for the fiscal year.

In addition to the plant closures, new measures will include cuts in executive salary and benefits,  consolidating R&D and introducing and development of early retirement programmes.  With these additional incentives,  Sony expects to yield a further 150 bn Yen in addition to the savings already identified from the initial cost-cutting moves.

Sony's TV manufacturing in Japan is currently restricted to two factories with production ceasing at one of these by June.  In addition, thirty-percent of TV design operations will be eliminated by the end of FY10.  Corporate limits on recruitment and the introduction of a early-retirement  programme will commence later this year.

This is all probably not surprising in the current economic climate, but we will undoubtedly start to find out more about other company's fortunes as we are now entering that period when some companies will be making their fourth quarter and end of FY reports.

Avid is shortly due to report its fourth quarter 2009 results.  Of course it is not prudent to speculate the results in advance, but with disposals and restructuring it could be assumed what the results might contain.

Thomson has been reported possibly being the recipient from a fund launched by the French Government designed to support small and medium-sized companies,  particularly those which the French Government consider strategic.

French newspaper Le Figaro has reported that the government has been considering using some of a $20 billion euro ($28 billion) to tie that the group over for a few weeks.  It has further been reported that Rothchilds has been appointed as bankers.

In October,  Thomson vowed to restructure or sell unprofitable businesses to support profits, increase cash and reduce debt.  Stockholders and investors had been voicing their concerns for a simpler structure and a planned termination to parts of the organization which were considered loss making.  A number of these businesses have already or in the process of being disposed of.

Once of these businesses to go was the loss-making digital film transfer lines in the Broadcast & Networks businesses.  This was sold to a Venture Capital company PARTER Capital Group in Germany.  The line contributed €6 million to third quarter 2007 revenues, but expected to have been significantly loss-making in 2008 with related restructuring costs on 2008 close to €20 Million

This year, Thomson stock has had ninety percent wiped-off its value leaving a market value of €243 million.  Thomson's bonds have been downgrade to junk status over concern its finances and the uncertain outlook.

It is a uncertain time for many business and its is only when to figures come out can we appreciate the true cost of this economic downturn.

Forbes.com   marketwatch.com

BBC Persian Service Launches - at what cost?

Funding the transmission of programmes to other countries is not a new concept nor is without it's supporters or indeed critics.

Indeed throughout the last fifty years, many examples can be identified where Radio and Television programmes have been transmitted to other countries, both near and far. So its not new nor is it without its supporters and detractors.

Earlier this week, (14/01/09) the BBC launched its Persian Service - BBC Persian. This new service is totally funded by the British Taxpayer to the tune of £15 Million ($23.5 Million) and is transmitted from BBC World Service HQ in the centre of London, with the language used being Farsi.

Back in March 2008, BBC Arabic Television started transmission, again funded from the same sources.

This was not the first time that the BBC has attempted to set up an Arabic television service.

This attempt for BBC Arabic Television closed on 21 April 1996, after 2 years on air, when the BBC's partners, Orbit Communications Corporation (owned by King Fahd's cousin, Prince Khaled) pulled the plug after the BBC broadcast an episode of topical current affairs programme, Panorama, which was critical of the Saudi Arabian government.

Many of the staff who worked for the original BBC Arabic Television service went on to work for Al Jazeera television - Al Jazeera being one of BBC Arabic Television's main competitors.

It's not the aim here to highlight the politics or the rights or wrongs of which country or countries should be transmitted 'too' and by 'whom'. I am carefully avoiding the word propaganda as it does attract to other discussions about Government paranoia and propaganda, but is this not all really the case that this is indeed state-funded propaganda, funded by the tax-payer and therefore is it justified?

Do these broadcasts actually bring 'free-speech' to countries where this concept may be deemed to be unknown. In the current difficult economic conditions, to fund in large amounts of cash to pay for these services is difficult to justify.? UK tax-payers may have additional questions about this when they currently have to pay £135 ($211) a year to watch television for regardless of content and source.