Earnings: Metro International Loses €5.4 Million Through Online Investment In 2008
The world’s biggest free newspaper publisher Metro International made a €5.45 million (£4.84 million) loss on its online operations in the year to December 31 after continued web investment - €1.6 million more than its online losses the year before.
SEE ALSO: Schibsted Buys A Third Of Metro Sweden - Tipping Point For Freesheets?
The company claims it grew its print readership by 10 percent in Q408, increased its newspaper audience share in 13 countries in 2008 and continues to launch titles in countries such as Mexico and Russia—yet so far it has suffered nothing but losses from online. But CFO Anders Kronborg said in the investors’ call today that it’s not a loss, it’s a long-term digital investment: “You will notice that we have decided to start writing off our online investment, which will have an impact on each quarter of the next two years.” What exactly the online investment entailed wasn’t mentioned.
We heard in October, at the release of Metro’s Q308 results, that it was engaged in a “strategic review” of its seven websites to see if they could make money; the company now says it is working on “creative digital products” in Sweden, France and Spain—and Kronborg says the online investment is designed to have a positive impact on the balance sheet eventually. More details from the results after the jump…
—Full-year earnings: CEO Per Mikael Jensen had the unwelcome job of telling investors revenue dropped 11 percent year-on-year to €295.5 million (£262.6 million), compared to €331.1 million in 2007, but made a net profit of €4.1 million (£3.6 million), compared to a €20.1 million (£17.8 million) net loss in 2007. But if you strip away Metro’s big money divestments like selling 35 percent of its Swedish operations to the Schibsted group, the company made an operating loss of €20 million (£17.7 million).
—Q408 results: Its readership is growing, but Metro’s profits are not. Sales declined 14 percent year on year to €83.5 million (£74.2 million) in the four months to December 31 and the group made an operating loss of €1.9 million (£1.68 million) compared to an operating profit of €3.4 million (£3 million) in Q407—and a net loss of €9.8 million (£8.7 million). Most of the losses come from “restructuring costs”, rising from shutting the company’s Spanish operations and moving its headquarters from London to Stockholm. Jensen says there might be some more costs related to those developments in H109.
—Rights issue: Hovering over Metro, just like almost every major newspaper company, is the spectre of debt. The company admits it “does not have sufficient working capital for the next 12 months” and is proposing a SEK 550 million (£45.81 million) rights issue to shareholders at at EGM on February 24, designed to re-pay its bank facility of €28.7 million fully by April this year.
Posted In: Media & Publishing, Newspapers, Money, Earnings, Countries, Europe, Scandinavia, Sweden, Spain, metro
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