Debt-laden French media technology group Thomson SA posted a 20% fall in third-quarter sales and said it had yet to clinch deals to sell assets earmarked for disposal.
The group also said approval by shareholders of the debt-for-equity restructuring deal, aimed at slashing 45% off €2.9 billion ($4.33 billion) of debt, would now be delayed to the first quarter 2010 from the fourth quarter 2009.
Thomson, which sealed a debt restructuring deal with creditors in July, has been seeking to sell assets as part of its efforts to boost its balance sheet.
“Thomson continues to work towards the implementation of the restructuring announced on July 24 2009, which is supported by a majority of its senior creditors,” the statement said.
Since July, the group received the support from additional senior creditors, it added.
The supplier of set-top boxes, professional DVD, video and telecom equipment, said third quarter sales reached €803 million, down 20.2% at current currency, and down 19.4% at constant currency.
It blamed the revenue decrease on “weak orders from Connect customers, continued weakness of the DVD replication market and closure of the North American telephony business at end 2008.”
Thomson competes with Motorola, Siemens and Sony Corp. The group's key clients include film studios, software and games producers such as Microsoft and Electronic Arts, European and American broadcasters, satellite operators and telecoms groups such as France Telecom.
“Disappointing Q3 but satisfactory cash generation,” said Oddo Securities in a note.
The group's cash position at end-September was €551 million, a rise of €40 million from June 2009.
Estimated net financial debt stood at €2.170 billion at end-September against €2.311 billion at end-June.
To cut debt, Thomson SA has vowed to sell businesses that contributed around €1 billion to its 2008 sales, including broadcast and TV/film equipment maker Grass Valley, advertising unit, and cinema advertising unit Screenvision.
On Thursday, Thomson said the sale process of Grass Valley was still ongoing and that “it is premature at this stage to anticipate the outcome of the negotiations.”
It said the PRN disposal process had resumed and that the Screenvision US disposal was “in final stages of discussions.”
Thomson SA shares have gained 40% so far this year, giving it a market capitalization of €363 million. (Reuters)