Vivendi chief Rene Fourtou is nursing the group back to health

The company said it made a net loss of 6 million euros in the first quarter, down sharply from 319 million euros in the same period last year.

The improvement reflected a stronger performance in its telecoms, film and television operations.

Investors welcomed the news, marking Vivendi shares up 2% in early trade.

Vivendi said healthy operating profits in its telecoms, film and television businesses had outweighed sharply higher losses at its ailing electronic games division.

Payback

Its Universal Music subsidiary - home to U2 and Eminem - also finished in the red, but its losses shrank to 16 million euros from 28 million euros one year ago.

Vivendi said in a statement that the figures showed "significant progress".

Vivendi, originally a staid French water utility, transformed itself into the world's second-biggest media conglomerate during a late 1990s acquisition spree led by former chief executive Jean-Marie Messier.

But the takeover binge racked up huge debts which precipitated a financial crisis and cost Mr Messier his job two years ago.

In 2002, Vivendi crashed to a full-year loss of 23.3 billion euros, the biggest in French corporate history.

New chief executive Jean-Rene Fourtou has focused on repaying Vivendi's debts by selling off assets - including some of Mr Messier's most high-profile acquisitions.

Earlier this month, he negotiated the sale of Vivendi's prized entertainment assets - including the iconic Universal Studios movie empire - to NBC, the television arm of General Electric.

Vivendi said it now had outstanding debts of 7 billion euros, down from 11.6 billion euros at the end of March.

Analysts gave the latest figures their seal of approval.