LOS ANGELES - Restructuring helped recording company Warner Music Group narrow its net losses by 43 percent over a 10-month period, the company reported Monday.
The privately held, New York-based firm, home to artists like Madonna and Kid Rock, reported a $136 million net loss for the 10-month period ending Sept. 30, compared to a $239 million net loss during the same period last year.
Including a benefit from changes in currency exchange rates, total recorded music and publishing revenue was $2.54 billion during the period, up 2 percent over the $2.48 billion for the same period last year.
Without the benefit, total revenue was down 3 percent compared to the previous period, the company said.
WMG Chairman and CEO Edgar Bronfman Jr. said the company’s restructuring plan was ahead of schedule.
“Now that the lion’s share of the restructuring has been completed, we can turn our entire focus to building and developing the company’s roster of recording artists and songwriters,” Bronfman said in a statement.
The financial report covered a 10-month period because WMG has changed the end of its fiscal year from Nov. 30 to Sept. 30. The reporting includes the period from Nov. 29, 2003, to Feb. 29, 2004, when the company was still part of Time Warner Inc.
Factoring in the exchange rates, WMG’s recorded music unit generated $2.06 billion in revenue worldwide in the most recent period, up 1 percent over the same time last year. Excluding the benefit would mean an estimated 4 percent decline in global recorded music revenue, the company said.
Among the company’s recent top releases were albums by Josh Groban, Green Day and Jet. The previous year, its releases included albums by Madonna, Metallica and Linkin Park.
WMG’s music publishing business saw revenue of $505 million during the period, up 8 percent over the previous year.
Excluding the impact of the exchange rates, the company’s worldwide publishing revenue rose 1 percent, with the bulk of the gains in the United States, the company said.
WMG reported financial results earlier this year after it was acquired from Time Warner Inc. for $2.6 billion by an investor group including Bronfman, Thomas H. Lee Partners, Bain Capital and Providence Equity Partners. The deal closed March 1.
The company forecast the restructuring would generate at least $250 million of recurring annualized savings by the end of 2005. As of Sept. 30, the changes have resulted in an estimated $240 million in annualized cost savings, the company said.
In a conference call with Wall Street analysts, Bronfman said he expects the company will double its sales next year from digital distribution channels such as online download sites and mobile music retailers.
“The trends are encouraging, and in 2005 we expect (digital sales) to represent 4 percent of overall sales, up from 2 percent this year,” Bronfman said.
He was also optimistic that the music industry’s sales slide in recent years has finally abated.
“We hope we’ve seen the bottom,” he said. “There is a more positive picture than the industry has lived the past three or four years.”