BOSTON Havas on Tuesday posted an 8.6 percent drop in first-quarter revenue to approximately $463 million, compared with the same period a year ago, based on the current rate of exchange.
Excluding the effects of changes in exchange rates and other factors, the organic decline was 5.8 percent, according to the Paris-based holding company, parent to the Arnold, Euro RSCG and Media Planning Group agency networks.
Havas in a statement attributed the dismal performance to "the uncertain geo-political climate," noting that, "organic growth was more negative in March than in the first two months of the year, particularly in communications and marketing services and mainly in the USA and U.K., which together represent approximately two-thirds of group revenue."
The drop in those markets, "results largely from a certain number of clients suspending some ... communication initiatives when the war began in Iraq," according to the statement.
Havas said first-quarter organic revenue growth in Europe and the North America fell 10 percent and 3 percent, to $227 million and $206 million, respectively, compared with the same quarter in 2001. South American organic revenue growth dropped 10 percent for the quarter to $13 million.
All told, in terms of organic growth, the marketing services sector was the poorest performer, with first-quarter revenue dropping 10 percent to about $234 million. Traditional advertising services, including media, dipped 1.3 percent to approximately $229 million.
"We remain cautiously optimistic for the three remaining quarters. While we do not see any strong signs of recovery as yet, we do believe that the trend for communications spending will be positive for the rest of the year," Havas CEO and chairman Alain de Pouzilhac said in the statement.
Havas shares closed on Monday at $3.69 on the Nasdaq stock exchange. The 52-week high is $7.88, the low $2.55.
In keeping with French accounting practices, the sixth largest holding company will report first-half earnings in September.