PARIS (Reuters) - French media group Vivendi VIV.PA reported better than expected core profit growth for the second quarter on Thursday and confirmed its outlook for the year, saying its struggling Canal Plus pay TV arm was showing signs of improvement.

The Vivendi logo is pictured at the main entrance of the entertainment-to-telecoms conglomerate headquarters in Paris, March 10, 2016. REUTERS/Charles Platiau

Earnings before interest, tax and amortization (EBITA) grew 16 percent from a year earlier to 203 million euros ($242 million), it said in a statement.

A poll of analysts for Reuters by Inquiry Financial had forecast on average an EBITA result of 183 million euros.

Vivendi, led by billionaire Vincent Bollore, has ambitions to become a European media powerhouse and has made acquisitions in the telecoms, broadcasting, advertising and video gaming sectors to that end.

Vivendi’s two main units, Canal Plus and Universal Music Group (UMG), have offered contrasting performances lately.

Canal Plus’s results have been hampered by the operating losses of its French channels, while UMG is benefiting from higher streaming revenues.

However, Thursday’s statement said that “tangible signs of improvement in revenues and EBITA” had been seen at Canal Plus in the second quarter.

Although the core French Canal Plus business is still struggling with falling sales, international pay-TV operations did well with a net increase in its subscriber base in the first half.

Meanwhile, the Canal Plus French operation is beginning to benefit from its foray into the bundled telecoms, TV and internet market. A presentation accompanying the results showed that it now reached about 3 million out of its 8 million clients through telecoms networks.

Vivendi reaffirmed an EBITA target for the year of 350 million euros for the unit.

‘DESPACITO’ BENEFITS

UMG, which Bollore has said he may list separately on the stock market, reported healthy 14 percent revenue growth for the first half in part thanks to impressive sales of Luis Fonsi’s record-breaking “Despacito”, featuring Daddy Yankee and Justin Bieber.

The song has become the most-streamed of all time with over five billion streams across all streaming platforms.

It is the first non-English U.S. No. 1 in more than two decades, and in Britain, it has become the longest-running foreign language No. 1 in history.

Vivendi has been under a spotlight in Italy lately after it built up significant stakes in Telecom Italia (TIM) TLIT.MI and the country's biggest private broadcaster, Mediaset MS.MI.

In July, the group bought out the 60 percent stake of advertising group Havas HAVA.PA owned by Bollore's holding company.

Havas warned last week that it may not achieve its target for between 2 and 3 percent organic revenue growth in 2017 because of falling advertising spending and a downturn in high growth markets.

However, the Vivendi statement said the integration was still expected to have a positive impact on group earnings for the second half of 2017.

Yannick Bollore, one of the billionaire’ s sons, heads Havas and has been lined up by his father to eventually take over as the boss of Vivendi.

Bollore also appointed two of his allies to the Vivendi board on Thursday to exert even tighter control on the group.