At the Board meeting today, the Board of Directors of Schibsted ASA approved the interim financial statement as of March 31, 2003.
Please find enclosed the Interim Report for 1st Quarter 2003.
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Financial situation
Schibsted’s operating revenues for the 1st quarter of 2003 amounted to NOK 2,029 million, an increase of NOK 40 million compared to the same period in 2002. This rise is linked to increased circulation revenues in the Newspaper business area plus increased revenues from activities in Estonia. The operating profit before goodwill and other revenues and expenses increased from NOK 129 million for the 1st quarter of 2002 to NOK 178 million in the 1st quarter of 2003. This progress is mainly due to the increased revenues and lower cost level established in the newspapers, as well as positive results from Estonia and multimedia activities.
Income from associated companies for the 1st quarter amounted to NOK -25 million. The improvement of NOK 17 million is due to improved results by the regional newspapers, 20 Minutes and TV 2.
Net financial items for the 1st quarter of 2003 were NOK -50 million, compared with NOK -11 million in 2002. As a result of a weakened Norwegian krone, the Group recorded a loss on foreign exchange, mainly linked to the syndicated loan facility of NOK 38 million in the 1st quarter. In the same period of 2002, the Group recorded a gain on foreign exchange of NOK 7 million. Changes in exchange rates will be counteracted by reduced interest costs in the future. As a result of repayments of interest-bearing debt and a reduced interest-rate level, the Group’s interest costs have been reduced by approximately NOK 10 million in the 1st quarter of 2003. Repayment of debt is related to sale of parts of the Group’s property holdings in 2002. Net interest-bearing debt has increased by NOK 49 million since the start of the year. Alongside profits and investments, this is also due to seasonal fluctuations in the Group’s working capital, payment of pension premiums, tax and repurchase of shares. Total liquidity reserves for the Group as at 03.31.2003 were approximately NOK 1.5 billion.
Estimated taxes as at the 1st quarter of 2003 were NOK 29 million (33 %), compared with NOK 38 million in the same period in 2002. 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.
In the 1st quarter of 2003 the Group invested NOK 53 million in fixed and intangible assets and NOK 4 million in shares.
In the 1st quarter of 2003 20 Min Holding AG has entered into an agreement with Express Zeitung AG, which is owned by Tamedia (82.5 %) and Berner Zeitung (17.5 %), about a cooperation and sale of shares in 20 Minuten (Schweiz) AG; the operating subsidiary of 20 Min Holding AG in Switzerland. On the assumption that the Swiss Competition Authority accepts the agreement, 49.5 % of the shares in 20 Minuten (Schweiz) AG will in the first round be taken over by Express Zeitung AG. The agreement further assumes that Express Zeitung AG takes over the remaining 50.5 % in a two step process within 1st quarter of 2007. The price will be based on development of sales and results. Until then, the company will be operated as before, as part of 20 Min Holding and management control will remain in 20 Min Holding. Sale of 49.5 % of the shares to Tamedia is not expected to give substantial effect on Schibsted’s financial statements.
In accordance with authorisation from the Annual General Meeting, Schibsted ASA has repurchased 1,538,000 shares, 405,000 of these in 2003. The Group’s equity ratio was 35.9% at the end of the 1st quarter of 2003, compared to 34.1% at the beginning of the year.
Future prospects
In the advertising market, it is primarily classified advertisements which have experienced the biggest decline and there are no signs of any imminent improvement. TV, Internet and brand/display advertising in newspapers are enjoying positive development. The 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 is unlikely to experience growth in 2003. Despite this, Svenska Dagbladet is expected to show a significant improvement in profit, and will be well positioned for an upturn in the advertising market.
Growth in turnover for the major commercial TV channels in the Nordic region should result in increased activity for Metronome Film & Television within production of TV programmes and advertising films in the future. Sandrew Metronome is expected to post good figures, mainly thanks to sales of the second Harry Potter film. Advertising receipts for TV 2 are good and 2003 should be another good year for the TV channel.
Schibsted will continue to focus on improved profitability and cash flow within all its business areas.
Parts of the Group’s long-term financing will fall due in 2003 and 2004, and this loan facility will be replaced during the 2nd half of 2003 and the 1st quarter of 2004.
Oslo, 7 May 2003
The full report can be downloaded from the following link:
Presentation of the 1st Quarter results can be downloaded from the following link: