France's Deezer pledges to turn a profit by 2025 (updated)

Deezer SA

21/09/2022 17:25

(Adds details, background)
    By Mathieu Rosemain
    PARIS, Sept 21 (Reuters) - French music streaming platform
Deezer  DEEZR.PA 's first-half adjusted gross profit rose 9.1%
from a year earlier, led by a surge in sales in its home country
that firmed up its goal to turn a profit by 2025, the company
said on Wednesday.  
    The group, once championed in France as being one of the
first and most promising so-called unicorns, companies valued at
1 billion euros or more, is striving to convince investors of
its capacity to turn a profit by 2025 by focusing on key markets
such as France, Brazil and the Netherlands, and new services.
    Gross profit increased to 45 million euros ($44.4 million)
from 42 million a year earlier, while total sales rose by 12%
over the period to 219 million euros, Deezer said in a
statement. 
    This was mainly due to a gain in the average revenue per
user (ARPU), which jumped by 12.4% to 3.9 euros. Deezer's number
of direct subscribers in France, where it generates about 60% of
its consolidated revenue, rose to 3.3 million from 3 million a
year earlier. 
    Yet the total number of subscribers fell by close to 3% to
9.4 million.
    "By focusing our business on large attractive markets and
entering new markets with a partnership-led model, we are
convinced we can capture a fair share of the booming streaming
market and continue improving our profitability to reach
breakeven by 2025," Chief Executive Officer Jeronimo Folgueira
said.  
    Suffering from comparison to bigger rivals such as Spotify
 SPOT.N  and Apple Music  AAPL.O , Deezer hasn't yet recovered
from its painful debut on Euronext's Paris stock exchange in
July, which saw its shares plummet by 35% in the first few hours
after its listing.  urn:newsml:reuters.com:*:nL8N2YM1G1
    The stock has lost 65% of its value since its first trading
day, valuing the company at 472 million euros ($466.38 million),
compared to Spotify's market capitalisation of $18.7 billion. 
    ($1 = 1.0120 euros)


 (Reporting by Mathieu Rosemain; Editing by Elaine Hardcastle
and Emelia Sithole-Matarise)
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