EMI profits rocked by Asian turmoil

British music group EMI, which earlier this month spurned takeover offers from Canadian conglomerate Seagram, yesterday revealed the Asian financial crisis had badly hurt full-year profits.

For the year to March, pretax profit fell 19 per cent to GBP307.1 million (about HK$3.89 billion), although the group insisted underlying sales growth reached 5.8 per cent - ahead of world music market growth of 3.2 per cent.

'Our financial results were adversely affected by a number of cyclical issues this year - the strength of sterling, lower growth in the global music market and the economic downturn in Japan and Southeast Asia - and so do not reflect the underlying strength of our business across both emerging and developed markets,' EMI chairman Sir Colin Southgate said.

The group said music markets in Southeast Asia had suffered in line with the economic woes in the region, the hardest hit being South Korean and Thai markets.

Asia-Pacific turnover fell 16 per cent to GBP618 million, though operating profit in the region collapsed 81 per cent to just GBP9.7 million, from GBP52 million in the same period last year.

The Asian turmoil was calculated as cutting profits by about GBP25 million, while the strength of sterling shaved off a further GBP37 million.

EMI Music's Asian operations accounted for the bulk of the decline, as operating profit fell 76 per cent to GBP12.2 million, the group said.