Friday, Norwegian media company Schibsted (SBSNF.PK) reported a decline in third-quarter profit, as advertising revenues fell by 3% from the prior-year period, negatively impacted by the financial crisis.
Schibsted posted third-quarter net income of NOK 25 million, down from NOK 52 million in the prior-year quarter. Net income attributable to majority interests was NOK 11 million, compared to NOK 18 million last year. Earnings per share were NOK 0.16, down from NOK 0.26 in the same quarter last year. Adjusted earnings per share dipped to NOK 0.51 from NOK 1.72 in the previous-year quarter.
Quarterly operating revenues grew to NOK 3.182 billion from NOK 3.179 billion in the comparable period a year ago. Advertising revenues declined 3% during the period, while circulation revenues remained unchanged. Schibsted noted that the financial crisis had a negative effect on its operating revenues and developments have been particularly weak in the second half of September. Print classified ads have been especially affected.
Schibsted reported that in Spain, operating revenues from print publications fell by 54%. The closure of titles accounted for 5 - 10 percentage points of this reduction. Consequently, it has decided to close down all the Spanish print classified ads operations from November 2008, which would lead to restructuring costs of EUR 10 million that would be expensed in the fourth quarter. Besides, the restructuring is partly related to a headcount reduction of 217, which totals EUR 7 million of the restructuring cost.
For the nine-month period, net income was NOK 1.11 billion or NOK 16.19 per share, compared to NOK 596 million or NOK 7.69 per share in the year-ago period. Adjusted earnings per share were NOK 6.46, compared to NOK 6.85 in the prior-year period. Operating revenues rose to NOK 10.20 billion from NOK 9.98 billion in the year-earlier period.
Moving ahead, the Group's Board has decided an extensive profitability programme that includes measures to increase revenue and reduce costs, including through downsizing. The effect of this programme will be NOK 500 million in 2009 in the Group operating profits. The restructuring costs related to this are expected to be around NOK 120 million and will mainly be debited in the fourth quarter.
Further, as part of the profitability programme for 2009, Schibsted is planning to reduce its investments in organic projects to approximately NOK 200 million in 2009.
SBSNF.PK lastly traded at August 11, 2008 at $29.25.
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