Music giant EMI has fallen into the red after accounting for the cost of dropping many of its artists.
Robbie Williams is one of EMI's biggest selling artists
EMI reported an annual post-exceptional loss of £52.8m ($94m), compared with a profit of £323.8m in the previous year.
The firm, which said it would axe 1,500 jobs in March, is cutting its artist roster by a fifth and outsourcing CD production in Europe and the US.
UK-based EMI, whose stars include Robbie Williams and Norah Jones, also saw group sales fall 1.4% to £2.1bn.
EMI said its results for the year to 31 March had been hit by an operating exceptional charge of £138.3m "primarily due to label and roster reorganisation".
Meanwhile, the profit figure for 2003 had been boosted by the one-off £210m gain from the sale of HMV.
On an underlying basis, the group announced a near 9% fall in adjusted pre-tax profits, to £163.3m from £178.8m the previous year.
The world's third largest music firm is continuing to struggle with falling CD sales due to the popularity of online download services, which have led to a greater music piracy.
EMI said CD sales slipped 2% to £1.7bn, but that this should be viewed against a drop of 5.6% in the global recorded music market.
It forecast that this year the global music market would stand still, at best, or shrink by 4%.
However, EMI reported "a positive impact" on its fortunes from efforts to contain piracy, saying "legitimate digital music" had taken off, pulling in sales worth £15m.
Crackdowns have had more impact on the US market than in Europe, where sales were 13% lower.
EMI saw its global market share rise to 13.2%, up from 12.7% the previous year, as it made advances in North America, Europe and Asia.
Chairman Eric Nicoli said: "For the first time in
several years, there are encouraging signs of market
improvement, particularly in the US, the world's largest music market."
EMI said it was "on track" to achieve annualised savings of £50m through outsourcing manufacturing and changes at its record labels, with £25m of it coming this year.
EMI said 20 of its albums sold over 1 million units, led by Norah Jones, Coldplay and Robbie Williams.