ProSieben's core profit drops due to weak German ad market

By Emanuele Berro, Cian Muenster and Klaus Lauer

March 26 (Reuters) - ProSiebenSat.1 PSMGn.DE reported a 28% fall in its adjusted 2025 core profit on Thursday, hit by low ad revenues, a longstanding issue the German media group does not expect to improve before the second half of this year.

However, the company's shares rose more than 6% by 1016 GMT, in a sign of some investor relief after it said 2026 revenue would grow slightly when adjusted for currency effects and portfolio changes.

"The rise in the (ProSieben) shares today is most likely just a short-term technical rebound after heavy losses, not a sign of a lasting trend reversal," analyst Harald Hof from mwb research said.

ProSieben, controlled by Italy's Berlusconi family after a 2025 acquisition by MFE MFEB.MI, has struggled with a weak TV advertising environment for several quarters, as consumer restraint in a difficult macroeconomic environment was met with cautious spending by advertisers.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) dropped nearly 28% to 403 million euros ($466 million) last year, falling short of its own guidance of 420-450 million euros.

Advertising revenue for the entertainment unit in the German, Austrian and Swiss markets fell 8% compared to 2024.

With no improvement in TV advertising expected in the first six months of 2026, the broadcaster expects the entertainment division's revenue to remain stable this year.

It also said group EBITDA would rise significantly thanks to continued cost reductions. It did not provide guidance for the adjusted number that would exclude one-off costs that weighed on 2025 earnings.

"Visibility is very poor ... the outlook will be affected by what is going to happen outside our world," CEO Marco Giordani said during a press conference.

Following MFE's acquisition and the appointment of industry veteran Giordani as CEO, the broadcaster has sharpened its focus on the entertainment operations and offloaded several non-core businesses.

But ProSieben said it would retain beauty retailer Flaconi as long as it remains a value-accretive asset, confirming an earlier report by Reuters.

($1 = 0.8651 euros)