Divestment of building in Q1 2008 and effects on the preliminary results of Q4 2007

Schibsted has entered into an agreement to sell the building in Akersgaten 55 in Oslo, the VG building. The building contains offices and the shopping centre VG-passasjen, totally approximately 33,000 square metres.  The sales price is NOK 1,203 million, and the accounting gain for Schibsted will be around NOK 840 million (approximately half of the gain is expected to be tax free). Date of hand over and payment is agreed to be March 3. 2008, and the transaction will be booked in Q1 2008. At the group level the sale will have a net yearly negative impact on operating profit before other revenues and expenses (EBITA) of about NOK 60 million. At the VG level the rental costs will be unchanged.

 

The macro conditions in Schibsted’s main markets remain reasonably good, and neither in Norway nor in Sweden has Schibsted experienced signals of weaker trade outlook, except for the matters described below.

In Spain, the macro outlook is uncertain. In Schibsted this affects the growth rate of Fotocasa, which operates in the market for real estate advertisements, while InfoJobs, which operates in the market for online job advertisements, is unaffected.

 

In Spain, Schibsted International Classifieds has experienced decreased demand for print advertisements and slightly decreased growth rate in the real estate online services in Q4 2007. In total, the print revenue of Schibsted International Classifieds has decreased 25 percent compared to Q4 2006. 4-5 percent age points of this are due to closing of titles. The online part of the business has increased its revenues by 56 percent in the same period.

 

In Norway the growth rate of job advertisements has flattened out for Aftenposten print. Online, Finn continues it’s positive development. Organisational changes have influenced sales in Aftenposten Multimedia negatively in Q4. The Swedish free sheet Punkt SE shows good growth in recent readership reports. However, there us a time lag before this materializes into increased sales, as expected.

 

Schibsted has had one-off items (amortization, bonuses and others) affecting EBITA during Q4 2007. Preliminary figures indicate that the most material elements add up to NOK 60-70 million. In addition, the results of Q4 will be charged with restructuring costs connected to Schibsted Classified Media.