CTS Eventim's core profit drops 25% as cost pressures weigh on promoters
Recasts with shares and EBITDA miss, paragraphs 1-5
By Elizaveta Gladun and Anastasiia Kozlova
Nov 21 (Reuters) -CTS Eventim EVDG.DE on Thursday reported weaker than expected core earnings for the third quarter, sending its shares tumbling more than 9%, even as its year-to-date sales grew to record highs.
Analysts pointed to persistently high cost pressures on promoters as a reason for the earnings drop, which might put pressure on consensus estimates for the full year.
"While CTS reported good top-line growth, profitability in the third quarter was disappointing, particularly in Live Entertainment," Oliver Wojahn, an analyst at mwb research, said.
The Live Entertainment segment saw its core profit, or adjusted earnings before interest, taxes, depreciation and amortisation, fall 25% in the third quarter to 36.5 million euros ($38.45 million).
At group level, adjusted EBITDA fell 8% to 121 million euros in the same period, missing a FactSet consensus by 25%, according to Jefferies.
Despite challenging economic conditions and high costs, CTS Eventim reiterated its forecast for the adjusted EBITDA to increase significantly in 2024.
"CTS EVENTIM is continuing to deliver stable growth in an increasingly volatile political and economic environment," CEO Klaus-Peter Schulenberg said in a statement, highlighting its strategy of rapid expansion and financial resilience.
The company has been expanding its footprint with long-term investments, including an arena project in Vienna, and ticketing partnerships for the 2026 Milan and 2028 Los Angeles Olympics.
Sales of its ticketing segment rose 18.3% to 206.6 million euros between July and September, notably boosted by presales for tours by artists like Ed Sheeran and Iron Maiden.
Group revenue crossed 2 billion euros for the first time in a nine-month period, driven by its diverse ticketing portfolio and expansion both organically and through acquisitions, it said.
Live Nation Entertainment LYV.N, CTS Eventim's main competitor and the world's largest concert promoter, recently reported its first quarterly revenue decline since 2021.
($1 = 0.9492 euros)
Reporting by Elizaveta Gladun and Anastasiia Kozlova in Gdansk; editing by Milla Nissi
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