Universal Music Group reports 21% rise in Q3 core earnings

By Toby Sterling

AMSTERDAM (Reuters) – Universal Music Group NV (UMG), the record label behind many of the music industry’s biggest stars, on Wednesday reported a 21% rise in third quarter core earnings to 461 million euros ($535 million), in line with company forecasts.

UMG’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) compared with 382 million euros in the same period a year ago.

It is the first time the company behind stars such as Lady Gaga and Taylor Swift has published earnings as an independent public company after it was spun off from former parent Vivendi in September in Europe’s largest listing of the year.

“Our results this quarter demonstrate the continued strength of our artist roster and catalogue, the increasingly diversified revenue streams of our business, and our ability to deliver growth for our shareholders,” said Chief Financial Officer Boyd Muir in a statement.

Revenue rose 16% to 2.15 billion euros, the company said, citing growth in recordings, publishing and merchandising.

It has forecast full year 2021 revenue to grow by more than 10% and adjusted EBITDA by more than 20%.

Shares in Universal surged on their first day of trading, at one point rising more than 30% from the listing reference price of 18.50 euros.

They have since traded sideways, closing on Wednesday at 25.135 euros.

UMG is betting that streaming boom led by Spotify, that has fuelled royalty revenue and profit growth for several years, still has a long way to run in a music industry it dominates along with Warner and Sony Music.

Spotify earlier on Wednesday reported better than expected third quarter subscriber growth.

($1 = 0.8624 euros)

(Reporting by Toby Sterling; Editing by Mark Potter, Kirsten Donovan)

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