We are seeing continued weakness in advertising markets which we expect will continue for at least the first half of 2002

RTL chief executive

Many media firms felt the pinch in 2001 as companies pared their advertising budgets to weather the economic slowdown.

RTL, which is 89% owned by German media group Bertelsmann, issued four profits warnings last year, the most recent in December.

Nonetheless, RTL outperformed many of its peers in Europe and the US, analysts said.

Tough times ahead

The Luxembourg-based broadcaster forecast conditions would remain difficult in 2002 as the advertising market has yet to recover.

"Based on our forward bookings to date, we are seeing continued weakness in advertising markets which we expect will continue for at least the first half of 2002," said RTL Group chief executive Didier Bellens.

RTL's television and radio businesses were hit particularly hard in 2001 amid the steepest decline in advertising in more than ten years.

The group posted a 13% fall in radio revenues, which was partly offset by income from French, British and German TV programming.

Winners and losers

One of the best performers in the group was French channel M6, with an 18% rise in revenues.

But core German channels RTL and VOX posted revenue falls of 3.5%.

The weakest sales performance came from UK network Channel5, where revenues fell 5%.

The cost of restructuring its North American business and the sale of stakes in German pay TV channel Premiere - part of struggling media group Kirch - and Poland's RTL7 also hurt profits.

The group said it would continue with cost-cutting measures and sales of non-core and non-performing assets in the future.

"Whilst the outlook for advertising markets remains tough, we believe our strategy of investment will bring enhanced revenues and margins when markets stabilise" said Mr Bellens.

RTL's shares rose 1.5% in early trade on the Euronext index Monday.