Interim Financial Statement per 30.6.2003

Schibsted ASA (SCH) , Published 14/08/2003 16:10:12

At the Board meeting today, the Board of Directors of Schibsted ASA approved the interim financial statement as of June 30, 2003.
Please find enclosed the Interim Report for 2nd Quarter 2003.
Information on internet:
Financial situation
Schibsted’s operating revenues for the 2nd quarter of 2003 amounted to NOK 2,169 million, an increase of NOK 204 million compared with the same period in 2002. The operating profit (EBITA) increased from NOK 203 million in the 2nd quarter of 2002 to NOK 288 million in the 2nd quarter of 2003. This progress is mainly due to increased revenues within all business areas and lower cost levels being established for the newspapers and multimedia activities.
Income from associated companies for the 2nd quarter of 2003 amounted to NOK 27 million. The improvement of NOK 26 million compared with the same period last year is due to improved results by the regional newspapers, the positive development in 20 Minutes and good results for TV 2.
Net financial items for the 2nd quarter of 2003 were NOK -6 million, (NOK -40 million). With effect from the 2nd quarter of 2003 Schibsted has changed its accounting principles regarding foreign currency. Previously, all gains and losses on foreign exchange related to receivables and liabilities in foreign currencies were reported in net profit on a current basis. With effect from the 2nd quarter of 2003, all foreign exchange gains (losses) relating to liabilities used for hedging investments in foreign units are recognised directly in equity. This change in accounting principle leads to a significant reduction in the Group’s net foreign exchange gains (losses) due to reduction in accounting exposure. In order to facilitate comparison, figures for previous periods have been restated.
In the 2nd quarter of 2003 interest bearing debt was reduced to NOK 1.5 billion (NOK 2.1 billion). Repayment of long-term debt has in combination with a reduced interest rate level, reduced interest costs by approximately NOK 20 million in the 1st half year of 2003. Net interest bearing debt is unchanged since the beginning of the year, despite repurchase of own shares, payment of a dividend in May and a normal seasonal increase in working capital. Total liquidity reserves for the Group as at 30.6.2003 were approximately NOK 1.4 billion.
The Group’s operating revenues for the 1st half year of 2003 were NOK 4,198 million (NOK 3,954 million). There was an improvement in the operating result (EBITA) from NOK 332 million in the 1st half year of 2002 to NOK 466 million in the 1st half year of 2003. Profit before tax was NOK 420 million for the 1st half year of 2003 (NOK 201 million). Taxes were NOK 130 million (NOK 87 million) by June 30. The net result for the 1st half year of 2003 was NOK 290 million (NOK 114 million). As a result of differences between accounting results and tax base, the Group’s tax expenses may deviate from the nominal tax rate in Norway (28%). These differences are primarily related to the amortisation of goodwill, income from associated companies and losses in foreign subsidiaries, for which no deferred tax benefit is recognised in the balance sheet. As a result of improved profit, reduced losses in foreign subsidiaries and positive contributions from associated companies, the Group’s tax rate was reduced to 31% for the period.
In the 1st half year of 2003 the Group invested NOK 144 million (NOK 209 million) in fixed and intangible assets and NOK 12 million (NOK 117 million) in shares and units. In accordance with authorisation from the Annual General Meeting, Schibsted ASA has repurchased 1,538,000 shares, 405,000 of these in the 1st quarter of 2003. The Group’s equity ratio was 39.7% at the end of the 2nd quarter of 2003, compared with 34.1% at the beginning of the year.
Future prospects
The market for classified advertisements is not yet showing any sign of improvement. TV, Internet and brand/display advertising in newspapers are all enjoying a positive development. The Schibsted tabloid newspapers are expected to maintain their clear leading positions in the single-copy market in Norway and Sweden respectively. Svenska Dagbladet achieved good circulation figures in 2002 and circulation is unlikely to grow in 2003. Despite this, Svenska Dagbladet might achieve a positive operating profit for the full year.
The weak development in classified advertising in Aftenposten will lead to lower revenues than expected, despite the strong growth in Further decline will be met with new rationalisation efforts. The 3rd quarter is traditionally a weak one for Schibsted, particularly in Aftenposten. The newspaper division as a whole, however, is expected deliver a significant growth in operating profit from last year.
Growth in turnover for the major commercial TV channels in the Nordic region will result in increased activity for Metronome within TV programming. In addition, solid advertising revenues for TV 2 will contribute to a significant improvement of the results of the TV/Film division in 2003.
Schibsted will continue to focus on improved profitability and cash flow within all its business areas with the aim of further improving the company’s financial flexibility.
Oslo, 14 August 2003
The full report can be downloaded from the following link:
Presentation of the 2nd Quarter results can be downloaded from the following link: