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French Utility Reports Profit Drop

September 24, 2002

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PARIS (AP) _ French utilities company Vivendi Environnement on Tuesday reported a 23 percent drop in its first-half net profit and confirmed that Jean-Marie Messier had resigned as chairman of its supervisory board.

Citing a difficult economic climate, the company said net profit fell to 213 million euros ($208 million) from 275 million euro in the same period last year. The drop was less severe than analysts had predicted.

The company, however, said that excluding onetime gains from asset sales last year, net profit grew 38 percent.

Revenue was up 7 percent at 14.97 billion euro ($14.6 billion).

Vivendi Environnement shares were down 1.5 percent Tuesday on the Paris exchange amid concern about its future within debt-ridden parent Vivendi Universal, the media and entertainment conglomerate.

Speculation has mounted in the past few weeks that Vivendi Universal may sell all or part of its shareholding in Vivendi Environnement as part of its strategy to reduce its massive $34 billion debt.

Meanwhile, Messier, the former chairman of Vivendi Universal, has resigned from his position as chairman of the board of Vivendi Environnement, but will remain a member of the board, the company confirmed. His position at the head of the board was filled by his successor at Vivendi Universal, Jean-Rene Fourtou.

Three former top executives of Vivendi Universal were also replaced, by Fourtou and by Vivendi Universal’s new chief financial officer Jacques Espinasse and by Groupama’s chairman, Jean Azema.

Vivendi Environnement, meanwhile, said asset disposals and a capital increase would help reduce its own debt, which stood at $14.5 billion as of June 30.

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