Vivendi warns of tough times ahead

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Vivendi warns of tough times ahead

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Vivendi has slashed its dividend payments to shareholders in anticipation of what it says will be two difficult years.

Europe’s largest entertainment and telecoms group is forecasting its profit will not grow in that time as it wrestles with tougher competition in the French mobile phone market.

It said group adjusted net profit would fall to a little over 2.5 euros this year, down from a record 2.95 billion last year.

Vivendi’s home market is being rocked by a price war after new player Iliad launched ultra low-cost mobile offers in mid-January.

The group’s SFR telecom business has since lost roughly 208,000 subscribers, a similar number to France Telecom, and Vivendi predicted the unit’s core profit would drop by up to 15 percent this year.

Responding to the new reality, Vivendi said it would reduce the dividend paid to investors on last year’s results to 1.00 euro per share from an unchanged 1.40 euros a year ago, with shareholders also receiving one share for every 30 owned.

Vivendi did achieve a 9.4 percent rise in group adjusted net income in 2011, helped by its GVT Brazilian telecom and Activision Blizzard video game units.