In a speech at the company's annual meeting, Seagram president and chief executive Edgar Bronfman Jr. reminded shareholders that in early October Universal broke its single-year domestic box office record of nearly $710 million. That mark had stood since 1982, the year of director Steven Spielberg's friendly alien hit "E.T.: The Extraterrestrial."

"While we are pleased with our box office resurgence, it will take several more quarters to return this business to profitability," Bronfman said.

He added that Universal's box office results have improved tremendously in recent months because of hits such as "The Mummy," "Notting Hill," and "American Pie".

"We believe we have a strong slate of new movies as we approach the millennium," Bronfman said.

Upcoming Universal releases include "The Bone Collector," starring Denzel Washington, the supernatural thriller "End of Days" with Arnold Schwarzenegger, and "Man of the Moon," which has Canadian comic Jim Carrey in the lead role playing the late comedian Andy Kaufman.

Bronfman, 44, told shareholders Universal was still feeling the effects of an 18-month drought at the box-office that began after the release of Spielberg's "Jurassic Park: The Lost World" in May 1997.

Speaking to reporters after the meeting, Bronfman said Seagram would not make a specific forecast on when the film unit would return to profitability because of the "inherent volatility of the business."

"We see real progress, but we are not going to point to any specific quarter for profitability," he said.

Turning to Seagram's PolyGram music division, Bronfman said he expects its integration with Universal to achieve annual savings of more than the $300 million initially projected by the end of fiscal year 2001. Seagram acquired PolyGram last year for $10.4 billion to make Universal Music the world's largest recorded music group.

Bronfman also took pains to quell rumours that Seagram may want to split into two companies, one in entertainment and the other in the drinks business on which the company was founded.

"We have said consistently that we are not going to split the company into two. We have no plans to do it, don't believe that we should do it, and don't intend to do it," he told reporters.

During the annual meeting, Stephen Bronfman, the 35-year-old son of co-chairman Charles Bronfman, was elected to the Montreal-based company's board of directors. Bronfman, 68, told the gathering he was delighted his son was taking his "rightful place" on the board.

He also took the opportunity to indirectly address reports that he has not been altogether happy with the company stewardship of his nephew Edgar Jr. In 1995, Edgar Bronfman Jr. stunned many long-time Seagram shareholders by selling its dividend-rich 24 percent stake in DuPont Co. to buy 80 percent of MCA Inc, now called Universal.

"I would like to warmly congratulate my nephew Edgar on the courageous and professional way in which he is leading this company. You're doing a hell of a job," Charles Bronfman said.

Seagram is controlled by Montreal's Bronfman family members, many of whom now live in the United States. The company has roots in the liquor business stretching back to 1920 in Canada, from where it thrived during the US prohibition on the consumption of alcoholic beverages.

Seagram shares lost C$1.20 to C$69 on the Toronto Stock Exchange on Wednesday and were off 12/16 to 46-15/16 on the New York Stock Exchange. In April, Seagram's shares had more than doubled in value to reach C$98 in Toronto and $65 in New York, but they fell back during the summer on concerns about weakness in global music sales.