German newspaper publisher Axel Springer almost tripled core earnings in the quarter to September, helped by an extraordinary payment following the settlement of a dispute with insolvent media group KirchSpringer, home to Germany's most-read newspaper Bild, said on Tuesday that earnings before interest, tax and amortisation (EBITA) came in at 126.9 million euros ($163.4 million), up from 44.6 million in the third quarter of last year.
Chief Executive Mathias Doepfner, who cut 10 percent of Springer's staff at the beginning of Germany's media crisis to safeguard profits, reiterated the group's forecast that it would increase 2004 sales and EBITA compared with last year's.
"Even if you strip off the one-time effect, we are still significantly above our own plan and better than last year," Doepfner told a conference call.
"You are describing our ambitions correctly if you say that we aim to reach a 10 percent EBITA margin next year."
The group, which failed to take over Britain's Telegraph newspaper earlier this year, said it posted one-off income of 92.6 million euros after it settled a long-standing dispute with a former shareholder, the now insolvent Kirch Group [KRCH.UL].
Under the settlement, Springer received 60.3 million euros in cash from Kirch's insolvency estate and a 1.8 percent stake in ProSiebenSat.1 Media , Germany's biggest commercial broadcaster in which Springer now holds 12 percent.
Springer managed to increase sales slightly to 598.8 million in a still subdued advertising market in Germany, with advertising revenues up 3 percent and circulation revenues 2 percent.
Classified advertising, a newspaper staple, continued to fall in the German market, but advertising budgets of retail chains and brand products picked up slightly, and advertising sales at new products helped Springer, it said.
"We still don't see a clear turnaround on the advertising market," Doepfner said.
To offset its weak domestic market, Springer is launching new daily newspapers abroad, starting with tabloid daily Fakt in Poland, where it has quickly become the biggest newspaper by circulation.
Last month, it added a new regional newspaper in Hungary, and Doepfner said it was reviewing countries to find those in which a Fakt-like tabloid could also succeed.
Springer is also mulling new launches in China, where it opened an office in Shanghai. Doepfner said new products there could be special interest magazines, such as titles aimed at the car, women's, computer or cooking markets.
Source: Reuters
10.11.2004