Warner Music Group net losses grow to $41m but revenues rise

Warner Music Group has posted net losses of US $41m (€36m) for the three months to end of 2014, as quarterly revenues grew 1.7% year-on-year to $829m (€728.1m).

In the same quarter of 2013 – WMG’s Q1 – the company posted a net loss of $36m (€31.6m). On a constant currency basis, Q1 2014’s revenues were up 7%.

In terms of recorded music income, Warner Music posted revenues of $714m (€627.1m) in its Q1 2014, up 3% on the $691m (€607m) it recorded in Q1 2013. On a constant currency basis, these revenues increased by $55 million, or 8%.

Warner Group’s publishing company, Warner Chappell, recorded $119m (€104.5m) in revenues in Q1 2014, down 7% on its income of $128m (€112.4m) in Q1 2013. This decline was rounded to 3.3% at constant currency.

$4m was deducted from WMG’s final revenue total for ‘inter-segment eliminations’.

Warner Music put its revenue rise down to ‘a stronger international release schedule, including a release from Pink Floyd and carryover success of Ed Sheeran’s album “X”, which was reflected in our physical and digital results, partially offset by a slight decrease in our artist services and expanded-rights and licensing revenue’.

Physical music sales revenue increased by $20m to $293m (+7%), which Warner said was ‘driven by strong releases in the current period, including [those] from key artists such as Johnny Hallyday and Pink Floyd who traditionally sell predominantly more physical than digital’.

Digital recorded music revenue increased by $16 million to $272m (+6%), as a result of strong releases including Ed Sheeran and the continued growth in streaming.

The company said that streaming service-related revenue growth of $26 million was partially offset by digital download declines of $7 million.

Across WMG, US revenues made up $282m of revenues in the quarter, with $551m coming from outside its homeland of the States.

WMG owns $5.85bn in total assets, and is carrying $3bn in total long-term debt.

Stephen Cooper, Warner Music Group’s CEO, said: “Some strong new releases, as well as outstanding execution by our operators around the world during the holiday season, made for an excellent start to our fiscal year.

“Our extraordinary roster of songwriters and artists, combined with our first-class management team and our sustained investment in new opportunities, means that we are well-positioned to build on this success as the industry evolves.”

Added Eric Levin, Warner Music Group’s executive vice president and CFO: “We are pleased with our top line performance as well as our improved free cash flow. “We remain keenly focused on growth and managing our expenses.”Music Business Worldwide

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