Luxembourg, 8th February 2008 - Metro International S.A. ("Metro")
(MTROA, MTROB), today announced its financial results for the fourth
quarter ended 31st December 2007. The Group's consolidated results
have been prepared according to International Financial Reporting
Standards (IFRS).
HIGHLIGHTS FOR Q4 2007
* Net sales increased by 12% to US$ 139.2 million (2006: US$ 124.1
million).
* Operating profits (before disputed taxes) were delivered in 9 out
of 14 owned operations in the fourth quarter with the exception
of Czech Republic, Spain, Greece, the US and Bostad
* The operating profit was US$ 9.8m (2006: US$ 10.9 million profit)
excluding a disputed Advertising Tax provision in Sweden of
$10.2m and a net gain of $4.7m from the sale of 60% of Metro
Czech Republic in December 2007.
* Including these two items Group operating profit was US$ 4.3m
(2006: US$ 10.9 million profit).
* The contribution from subsidiary newspaper operations was an
operating profit of US$ 16.2 million excluding the provision for
Ad Tax in Sweden (2006: US$ 16.3 million profit).
* Metro International achieved a net profit of US$ 5.1 million
(2006: net profit US$ 11.5 million).
TWELVE MONTHS ENDED 31st DECEMBER 2007
* 8.8% year- on- year increase in net sales to US$ 453.0 million
(2006:US$ 416.5 million).
* Operating profits (before disputed taxes) were delivered in 10
out of 14 full year with the exception of operations undergoing
reorganisation: Czech Republic, Spain, the US and Bostad
* The operating loss was US$ 15.2m excluding a disputed Advertising
Tax provision in Sweden of $10.2m and a net gain of $4.7m from
the sale of 60% of Metro Czech Republic in December 2007 (2006:
US$ 4.6 million profit excluding a capital gain of US$ 12.3m from
the sale of Finland).
* Including these two items the operating loss was US$ 20.7m (2006:
US$ 16.9 million profit).
* The contribution from subsidiary newspaper operations for the
full year decreased to US$ 14.2 million, excluding the $10.2m
provision for Ad Tax (2006: US$ 26.7 million profit) mainly due
to the weak start to the year for the Swedish operations and the
increased losses in the US.
* Net loss of US$ 27.6 million ( 2006: net profit of US$ 13
million).
* Basic loss per share of US$ 0.05 (2006: profit of US$ 0.02).
Per Mikael Jensen, Chief Executive Officer of Metro International,
said:"Metro International has not been immune from the volatility
affecting the global newspaper industry, which has been reflected in
the latest results of the company. While the loss for the full year
2007 is a disappointment, the board, management and employees of
Metro International remain committed to reversing losses in markets
that are underperforming and to focus investment in areas of strong
potential growth, including online.""Nevertheless, I am encouraged by the current underlying performance
of the company in many markets, while there is a clear need for
further action to deliver sustained profitability."Since becoming Chief Executive last November, the company has
focused on a broad strategic review of its operations. This review
was designed to position Metro International for continued growth in
markets around the world where its strategy is successful and to
address areas of weakness. Action has already been taken to
reorganise the portfolio in markets such as Sweden, the Czech
Republic and the US, and further steps will be taken to develop
Metro's full potential around the world.""The 4th quarter is a seasonally strong quarter for Metro and this
was the case in 2007. However, the quarter's results are impacted by
a provision of $10.2m for Swedish Ad Tax. The Ad Tax provision is
prudent and reflects a recent judgement from the Swedish Tax Office
for the years 2001-2006. The Ad Tax is appealed by the company.
Excluding the Ad Tax provision, the underlying operational EBIT in
the fourth quarter 2007 is close to the operating profit for the
fourth quarter 2006.
In real terms, allowing for the depreciation of the US dollar, owned
operations net sales growth excluding Bostad, Poland and the divested
operation in Finland, was 5.0% year-on-year. This is primarily due to
recovering sales for Green Metro in Sweden which achieved similar
real sales to the fourth quarter 2006 and is an improvement on the
13% decline in Q3. Excluding Sweden, the rest of the group delivered
6.1% growth with especially strong growth in Holland, Czech, Italy,
Portugal, France, New York, Chile and Hong Kong. France achieved
back-to-back record sales in September and October. Year-on-year
sales growth was lower in November and December than in October
especially in the US as we felt the impact of the US credit crunch.
Excluding the Swedish Ad Tax provision, the contribution from
subsidiary operations delivered a similar EBIT to last year ($16.2m
profit v $16.3m profit). In Sweden, a $2.0m rebate for the reduction
in the Ad Tax rate from 8% to 3% from 1st January 2007 helped the
December results and after a weak third quarter it is evident that
underlying margins are trending upwards based on improving net prices
for Green Metro. In December 2007 the Stockholm edition of Bostad was
suspended for 2008 due to lack of profitability and was replaced with"Living" - a supplement in Green Metro which was profitable from the
first edition. The profitable Malmo edition of Bostad continues.
Despite continuing strong competition Denmark maintained its
profitability at the 2006 level delivering a high double-digit profit
margin in Q4. Similarly, Holland continues to deliver high EBIT
margins based on healthy page rates and strong volumes. Hungary also
continues to deliver good double-digit profit margins due to its
strong position in the newspaper market.
France and Italy delivered very strong profits in Q4 based on strong
sales and cost savings in France and in excess of 20% real sales
growth in Italy. Portugal delivered over 30% sales growth despite
increased competition in Q407.
Sales in Spain's remain a concern and were down in the fourth quarter
following a very disappointing December and EBIT has consequently
declined. Competition in the market remains strong and Spain is
receiving a lot of management focus to improve performance.
Chile and Hong Kong have maintained their strong 2007 performance in
Q4 with sales and EBIT growth.
US results in Q4 were very disappointing. Good revenue growth in
October was followed by a drop in sales versus 2006 in November and
December as the US credit crunch started to bite. Cost reductions
involving 27 redundancies across the three US cities were implemented
in January 2008 to minimise the impact of revenue declines. Further
actions to improve the business in the US may be taken.
Looking at the full year performance, 2007 EBIT, excluding
divestments, is a loss of $25.4m compared to a profit of $4.6m in
2006. However, the underlying operational performance is not quite as
bad as it looks. The newspapers generated an EBIT loss of $4.9m due
primarily to poor results in Sweden and the US - actions have been
taken to rectify the weaknesses in 2008. The additional negative
results in 2007 are due to the $10.2m Ad Tax provision, $5.1m HQ
restructuring costs relating to the departure of senior executives
and the $5.2m investment in our online activities.
Excluding Sweden's Ad Tax provision, all of our controlled operationswere profitable in the FY07, except for Czech, Spain, the US and
Bostad. However, currently, the margins in profitable countries are
not high enough to cover the losses in the 4 operations and to cover
Online and HQ costs. This will be a key focus in 2008.
On 21st December we announced the sale of 60% of the Metro Czech
operation to MAFRA. This generated a profit of $4.7m. We are working
to deliver synergies with our new partner.
Our joint venture operations have delivered an additional $0.3m EBIT
in Q4 including a quarterly profit in Brazil after only 8 months of
operation. The improvement arises from the operations in Mexico,
Korea and Canada which all continue to deliver improving profits.
Canada's sales have increased 53% in Q407 versus 2006 and it is now
the 2nd largest Metro operation in terms of revenue.
Metro's board recently confirmed our commitment to developing our
Online business with web sites in France, Spain and Holland starting
with the French website launching in March 2008. We will test a new
interactive approach in Metro's metropolitan areas to strengthen
links with our readers and to provide advertisers with a
cost-effective route to our unique demographics. The 2007 central
investment was $2.7m for the year and $2.5m was invested in local
websites. Further investments will be decided based on the
performance of the first three websites.
Per Mikael Jensen
CEO
Metro International
For further information, please visit www.metro.lu, email
info@metro.lu or contact:
Per Mikael Jensen, CEO tel: +44 (0) 20 7016 1300
Frank Mooty, CFO tel: +44 (0) 20 7016 1300
Birgitta Henriksson, IR contact tel: +46 (0) 708 12 86 39
Metro is the largest international newspaper in the world. Metro is
published in over 100 major cities in 21 countries across Europe,
North & South America and Asia. Metro has a unique global reach -
attracting a young, active, well-educated Metropolitan audience of
over 20 million daily readers. Metro's advertising sales have grown
at a compound annual rate of 38% since the launch of the first
edition in 1995. Metro International 'A' and 'B' shares are listed on
the OMX Nordic Exchange's Nordic List under the symbols MTRO SBD A
and MTRO SBD B.
CONFERENCE CALL
The company will host a conference call today at 10.00 (CET). The
call will also be webcast on Metro's website at www.metro.lu. To
participate in the conference call, please dial in on the following
numbers:
UK / International: +44 (0)20 3043 2436
Sweden: +46 (0)8 505 598 53
US (free phone): +1 866 458 40 87
A replay facility will be available shortly after the conclusion of
the call at www.metro.lu
The full report with tables can be downloaded from the following
link:
METRO INTERNATIONAL S.A.: FINANCIAL RESULTS FOR THE FOURTH QUARTER ENDED 31st DECEMBER 2007
| Source: Metro International S.A.
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