Tallinn, Estonia, 2015-04-30 15:27 CEST (GLOBE NEWSWIRE) --
In the first quarter of 2015, the consolidated EBITDA of Ekspress Group amounted to EUR 1.5 million which is 4% more than last year and net profit amounted to EUR 0.6 million which is 11% more than last year. At the same time revenue decreased by 4%, totalling EUR 14.2 million. The first quarter’s EBITDA was also higher as compared to our forecasts and the growth of net profit was 20% higher than forecast for the current year. In the first quarter, the consolidated EBITDA margin of the Group increased from 9.8% to 10.7% year-on-year.
The above figures include all our joint ventures (AS SL Õhtuleht, AS Ajakirjade Kirjastus and AS Express Post) consolidated 50% line-by-line. Starting from 2014, in consolidated financial reports 50% joint ventures are recognised under the equity method, in compliance with new international financial reporting standards (IFRS). The change in this accounting policy does not affect the net profit, but it impacts the sales revenue and EBITDA. In its monthly reports, the management has continued to monitor the Group’s performance on a basis of proportional consolidation of joint ventures and the syndicated loan contract also determines the calculation of some loan covenants by proportional consolidation. For the purpose of clarity, the management report shows two sets of indicators: one where joint ventures are consolidated line-by-line 50% as previously and the other where joint ventures are recognised under the equity method and their net result is presented as financial income in one line.
In the first quarter, the EBITDA of the Group’s subsidiaries calculated under the equity method was 7% lower than a year earlier, meaning that the joint ventures where the Group has a 50% holding posted a better result in the first quarter than subsidiaries.
The result of the Group’s printing services company Printall was below last year’s level. In annual comparison, revenue in the first quarter was 11% lower and the profit was as much as 20% lower. Weaker results of Printall were attributable to the financial crisis in Russia that has negatively affected export markets of the Scandinavian printing industry, causing Scandinavian enterprises to lose revenue from Russia and creating a major price pressure in the whole region. However, Printall has quickly responded to the situation and while in January, its EBITDA was 40% lower than a year earlier and 18% in February, in March the gap had decreased to 10% while exceeding the company’s own forecast in March by 9%. For the quarter, the company is at present 13% below its forecast.
In the media segment, the total EBITDA earned by joint ventures and subsidiaries improved 20% from the year before, exceeding the Group's own forecasts by 34%.
Of joint ventures, the strongest year-on-year results were posted by AS SL Õhtuleht and AS Ajakirjade Kirjastus, earning significantly larger profits than a year earlier. Whereas the profit of AS SL Õhtuleht increased due to the impact of changes in printing contracts, AS Ajakirjade Kirjastus also benefited additionally from the successful operations in the advertising market and production of special projects.
The result of subsidiaries in the media segment was 17% lower than a year earlier, but exceeded the Group’s budget by 19%. The biggest difference between last year’s result and the budget for this year was the book series, which lasted throughout the first quarter in 2014, however were this year launched only in March. This mainly affects AS Eesti Ajalehed that only earned a profit of EUR 23 thousand from book series this year, as compared to a profit of EUR 133 thousand in the first quarter 2014. Due to the absence of book series in the first quarter, the revenue of AS Eesti Ajalehed was EUR 240 thousand lower as compared to the previous year and likewise, the revenue of the book publisher Hea Lugu was also EUR 187 thousand lower this year. At the same time, the result of AS Eesti Ajalehed for this year exceeded the company’s own forecast by EUR 75 thousand. The better-than-forecast result is due to the decision made at the start of the year to merge AS Eesti Ajalehed and AS Delfi. The organisations were merged in January and the legal merger between the two companies will take effect on 1 July 2015. The biggest positive effect of the merger has been significant growth in advertising sales capacity, resulting in a 15% increase in advertising revenue in the first quarter, as compared to last year.
In the first quarter, the result of the media segment decreased mainly because of Delfi Lithuania that posted a 33% fall in its EBITDA year-on-year. In the opinion of the Lithuanian company’s management, the result deteriorated mainly because of the changeover to euro at the beginning of the year. Since we saw a similar trend in Latvia a year ago, we expect consumption and advertising to recover after the initial shock has passed. In the meantime, Delfi Latvia posted an excellent result, having successfully overcome last year’s euro shock and earning about EUR 100 thousand more in EBITDA in the first quarter than a year earlier, and turning EUR 63 thousand loss earned a year ago into a profit of EUR 43 thousand. Delfi Estonia also had a strong result, increasing its EBITDA by 21% as compared to the year earlier.
Summarising the result of the media segment in the first quarter, we can say that online advertising revenue increased by 18%, revenue from subscriptions and retail sales remain at the same level as the year ago, print advertising revenues grew by 8% mainly thanks to the good result of AS Eesti Ajalehed and revenue of digital subscriptions and newsstand sales increased by 41%.
In the first quarter, we launched Eesti Päevaleht digital edition in a new platform. The next product to be transferred into new platform will be digital edition of Eesti Ekspress.
Another significant event in the first quarter was the launch of the new entertainment business line. In the final week of March, we opened in Riga the first exhibition about the first and final voyage of MS Titanic. The exhibition will probably remain open until the beginning of August and revenue of the exhibition will be reflected largely in the Group’s second-quarter result.
The modest start of the year has made us more cautious with regard of the second quarter. In the printing services segment, major price competition will prevail in Scandinavian markets, which will have negative impact on profitability of our printing services segment. However the company’s new printing machine put into operation at the start of the year will provide a flexible position for operating in the challenging situation. At the same time has difficult economic situation in Scandinavia given rise to closing several printing houses there thus giving us opportunity for acquiring new clients. As for media segment, we are moderately optimistic. Comparison base is also distorted by the compensation received on the second quarter of last year as a result of court case which then ended. Based on the above, we expect our consolidated revenue to grow by approximately 3%, but our forecasts for EBITDA and net profit to decrease 3% and 9% respectively below last year’s results. These figures also include the results of our 50%-owned joint ventures.
We continue developing Zave, our portal of discount offers and an innovative customer communication tool for retailers. In addition, we have set as our objective to significantly increase the number of digital subscriptions of Eesti Ekspress and Eesti Päevaleht.
We continue with the project in investing into Baltic startup companies with the objective of supporting young businesses that could develop their business with the help of the Group’s marketing power in Baltic states and prepare expanding to larger international markets.
Our mission remains to offer new and interesting experiences both on paper and in digital media, without ever compromising on news quality, choice of topics and journalistic objectivity. The company’s goal is to be a truly modern media company with a strong foothold in all markets where actively present, with a leading position in online media.
FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50% line-by-line
Starting from 2014, in consolidated financial reports 50% joint ventures are recognised under the equity method, in compliance with new international financial reporting standards (IFRS). In its monthly reports, the management has continued to monitor the Group’s performance on a basis of proportional consolidation of joint ventures and the syndicated loan contract also determines the calculation of some loan covenants by proportional consolidation. For the purpose of clarity, the management report shows two sets of indicators: one where joint ventures are consolidated line-by-line 50% as previously and the other where joint ventures are recognised under the equity method and their net result is presented as financial income in one line.
| Performance indicators – joint ventures consolidated 50% (EUR thousand) | Q1 2015 | Q1 2014 | Change % | Q1 2013 | Q1 2012 | Q1 2011 |
| For the period | ||||||
| Sales | 14 180 | 14 766 | -4% | 13 809 | 14 219 | 13 146 |
| EBITDA | 1 517 | 1 454 | 4% | 1 503 | 1 615 | 1 395 |
| EBITDA margin (%) | 10.7% | 9.8% | 10.9% | 11.4% | 10.6% | |
| Operating profit* | 762 | 691 | 10% | 840 | 756 | 555 |
| Operating margin* (%) | 5.4% | 4.7% | 6.1% | 5.3% | 4.2% | |
| Interest expenses | (174) | (176) | 1% | (197) | (488) | (559) |
| Profit /(loss) for the period* | 556 | 503 | 11% | 638 | 179 | (155) |
| Net margin* (%) | 3.9% | 3.4% | 4.6% | 1.3% | -1.2% | |
| Net profit /(loss) for the period in the financial statements (incl. impairments and gain on change of ownership interest) | 556 | 503 | 11% | 638 | 179 | 1 385 |
| Net margin (%) | 3.9% | 3.4% | 4.6% | 1.3% | 10.5% | |
| Return on assets ROA (%) | 0.7% | 0.7% | 0.8% | 0.2% | 1.6% | |
| Return on equity ROE (%) | 1.2% | 1.2% | 1.5% | 0.5% | 3.8% | |
| Earnings per share (EPS) | 0.02 | 0.02 | 0.02 | 0.01 | 0.05 |
* The results exclude one-off gains in relation to the acquisition in Eesti Päevalehe AS in 2011.
|
Balance sheet – joint ventures consolidated 50% (EUR thousand) |
31.03.2015 | 31.12.2014 | Change % |
| As of the end of the period | |||
| Current assets | 14 590 | 15 189 | -4% |
| Non-current assets | 63 538 | 65 665 | -3% |
| Total assets | 78 128 | 80 854 | -3% |
| incl. cash and bank | 3 887 | 6 788 | -43% |
| incl. goodwill | 39 432 | 39 432 | 0% |
| Current liabilities | 13 179 | 14 110 | -7% |
| Non-current liabilities | 17 219 | 19 569 | -12% |
| Total liabilities | 30 398 | 33 679 | -10% |
| incl. borrowings | 20 847 | 24 592 | -15% |
| Equity | 47 730 | 47 175 | 1% |
| Financial ratios (%) – joint ventures consolidated 50% | 31.03.2015 | 31.12.2014 |
| Equity ratio (%) | 61% | 58% |
| Debt to equity ratio (%) | 44% | 52% |
| Debt to capital ratio (%) | 26% | 27% |
| Total debt/EBITDA ratio | 2.33 | 2.61 |
| Debt service coverage ratio | 1.88 | 1.90 |
| Liquidity ratio | 1.11 | 1.08 |
FINANCIAL INDICATORS AND RATIOS – joint ventures recognised under the equity method
| Performance indicators – joint ventures under the equity method (EUR thousand) | Q1 2015 | Q1 2014 | Change % | Q1 2013 | Q1 2012 | Q1 2011 |
| For the period | ||||||
| Sales (only subsidiaries) | 12 093 | 12 734 | -5% | 11 812 | 12 177 | 11 149 |
| EBITDA (only subsidiaries) | 1 238 | 1 330 | -7% | 1 417 | 1 548 | 1 295 |
| EBITDA margin (%) | 10.2% | 10.4% | 12.0% | 12.7% | 11.6% | |
| Operating profit* (only subsidiaries) | 543 | 593 | -9% | 777 | 720 | 496 |
| Operating margin* (%) | 4.5% | 4.7% | 6.6% | 5.9% | 4.4% | |
| Interest expenses (only subsidiaries) | (155) | (176) | 12% | (197) | (489) | (563) |
| Profit of joint ventures by equity method | 194 | 98 | 97% | 63 | 40 | 70 |
| Profit for the period* | 556 | 503 | 11% | 638 | 179 | (155) |
| Net margin* (%) | 4.6% | 3.9% | 5.4% | 1.5% | -1.4% | |
| Net profit/(loss) for the period in the financial statements (incl. impairments and gain on change of ownership interest) | 556 | 503 | 11% | 638 | 179 | 1 385 |
| Net margin (%) | 4.6% | 3.9% | 5.4% | 1.5% | 12.4% | |
| Return on assets ROA (%) | 0.7% | 0.7% | 0.8% | 0.2% | 1.7% | |
| Return on equity ROE (%) | 1.2% | 1.2% | 1.5% | 0.5% | 3.8% | |
| Earnings per share (EPS) | 0.02 | 0.02 | 0.02 | 0.01 | 0.05 |
* The results exclude one-off gains in relation to the acquisition in Eesti Päevalehe AS in 2011.
| Balance sheet– joint ventures under equity method (EUR thousand) | 31.03.2015 | 31.12.2014 | Change % | |
| As at the end of the period | ||||
| Current assets | 11 712 | 12 303 | -5% | |
| Non-current assets | 62 410 | 64 292 | -3% | |
| Total assets | 74 122 | 76 595 | -3% | |
| incl. cash and bank | 2 290 | 5 275 | -57% | |
| incl. goodwill | 38 153 | 38 153 | 0% | |
| Current liabilities | 10 727 | 11 481 | -7% | |
| Non-current liabilities | 15 665 | 17 939 | -13% | |
| Total liabilities | 26 392 | 29 420 | -10% | |
| incl. borrowings | 19 482 | 23 152 | -16% | |
| Equity | 47 730 | 47 175 | 1% | |
| Financial ratios (%) – joint ventures under the equity method | 31.03.2015 | 31.12.2014 |
| Equity ratio (%) | 64% | 62% |
| Debt to equity ratio (%) | 41% | 49% |
| Debt to capital ratio (%) | 26% | 27% |
| Total debt /EBITDA ratio | 2.50 | 2.93 |
| Debt service coverage ratio | 1.75 | 1.77 |
| Liquidity ratio | 1.09 | 1.07 |
Cyclicality
All operating areas of the Group are characterised by cyclicality and fluctuation, related to the changes in the overall economic conditions and consumer confidence. The Group’s revenue can be adversely affected by an economic slowdown or recession. It can appear in lower advertising costs in retail, preference of other advertising channels (e.g. preference of internet rather than print media) and changes in consumption habits of retail consumers (following current news in news portals versus reading printed newspapers, preference of the younger generation to use mobile devices and other communication channels, etc.).
Seasonality
The revenue from the Group’s advertising sales as well as in the printing services segment is impacted by major seasonal fluctuations. The level of both types of revenue is the highest in the 2nd and 4th quarter of each year and the lowest in the 3rd quarter. Revenue is higher in the 4th quarter because of higher consumer spending during the Christmas season, accompanied by the increase in advertising expenditure. Advertising expenditure is usually the lowest during the summer months, as well as during the first months of the year following Christmas and New Year’s celebrations. Book sales are the strongest in the last quarter of the year. Subscriptions and retail sales of periodicals do not fluctuate as much as advertising revenue. However the summer period is always more quiet and at the beginning of the school year in September there is an increase in subscriptions and retail sale which usually continues until next summer holiday period.
| Formulas used to calculate the financial ratios | |
| EBITDA margin (%) | EBITDA/sales x 100 |
| Operating margin* (%) | Operating profit*/sales x100 |
| Net margin* (%) | Net profit*/sales x100 |
| Net margin (%) | Net profit /sales x100 |
| Earnings per share | Net profit / average number of shares |
| Equity ratio (%) | Equity / (liabilities + equity) x100 |
| Debt to equity ratio (%) | Interest bearing liabilities /equity x 100 |
| Debt to capital ratio (%) | Interest bearing liabilities – cash and cash equivalents (net debt)/(net debt +equity) x 100 |
| Total debt/EBITDA ratio | Interest bearing borrowings /EBITDA |
| Debt service coverage ratio | EBITDA/loan and interest payments for the period |
| Liquidity ratio | Current assets / current liabilities |
| Return on assets ROA (%) | Net profit /average assets x 100 |
| Return on equity ROE (%) | Net profit /average equity x 100 |
* The results exclude one-off gains in relation to the acquisition in Eesti Päevalehe AS in 2011.
SEGMENT OVERVIEW
From the 3rd quarter of 2014, when the Group’s Lithuanian subsidiaries were merged, the Group’s activities are divided into the media segment, printing services segment and entertainment segment launched this year. Previously, the entities of the media segment were divided into online media and periodicals segments.
The segments’ EBITDA does not include intragroup management fees, and impairment of goodwill and trademarks. Volume-based and other fees payable to advertising agencies have not been deducted from the advertising sales of segments, because the management monitors gross advertising sales. Discounts and rebates are reduced from the Group’s sales and are included in the combined line of eliminations.
Key financial data of the segments Q1 2011-2015
| (EUR thousand) | Sales | Sales | ||||
| Q1 2015 | Q1 2014 | Change % | Q1 2013 | Q1 2012 | Q1 2011 | |
| media segment (by equity method) | 6 581 | 6 414 | 3% | 5 923 | 5 633 | 5 228 |
| incl. revenue from all digital and online channels | 3 336 | 2 787 | 20% | 2 470 | 2 232 | 1 897 |
| printing services segment | 6 318 | 7 062 | -11% | 6 617 | 7 376 | 6 470 |
| entertainment segment | 61 | 0 | - | 0 | 0 | 0 |
| corporate functions | 471 | 421 | 12% | 355 | 139 | 26 |
| intersegment eliminations | (1 338) | (1 163) | -15% | (1 084) | (971) | (576) |
| TOTAL GROUP by equity method | 12 093 | 12 734 | -5% | 11 812 | 12 177 | 11 149 |
| media segment by proportional consolidation | 8 963 | 8 637 | 4% | 8 106 | 7 869 | 7 367 |
| incl. revenue from all digital and online channels | 3 551 | 2 987 | 19% | 2 599 | 2 370 | 2 025 |
| printing services segment | 6 318 | 7 062 | -11% | 6 617 | 7 376 | 6 470 |
| entertainment segment | 61 | 0 | - | 0 | 0 | 0 |
| corporate functions | 471 | 421 | 12% | 355 | 139 | 26 |
| intersegment eliminations | (1 633) | (1 354) | (1 269) | (1 165) | (717) | |
| TOTAL GROUP by proportional consolidation | 14 180 | 14 766 | -4% | 13 809 | 14 219 | 13 146 |
| (EUR thousand) | EBITDA | EBITDA | ||||
| Q1 2015 | Q1 2014 | Change % | Q1 2013 | Q1 2012 | Q1 2011 | |
| media segment by equity method | 279 | 338 | -17% | 207 | 192 | 8 |
| media segment by proportional consolidation | 558 | 466 | 20% | 294 | 259 | 107 |
| printing services segment | 1 161 | 1 459 | -20% | 1 414 | 1 529 | 1 496 |
| entertainment segment | 24 | 0 | - | 0 | 0 | 0 |
| corporate functions | (226) | (467) | 52% | (206) | (174) | (214) |
| intersegment eliminations | (0) | 0 | -100% | 1 | 0 | 5 |
| TOTAL GROUP by equity method | 1 238 | 1 330 | -7% | 1 417 | 1 548 | 1 295 |
| TOTAL GROUP by proportional consolidation | 1 517 | 1 454 | 4% | 1 503 | 1 615 | 1 395 |
| EBITDA margin | Q1 2015 | Q1 2014 | Q1 2013 | Q1 2012 | Q1 2011 |
| media segment by equity method | 4% | 5% | 3% | 3% | 0% |
| media segment by proportional consolidation | 6% | 5% | 4% | 3% | 1% |
| printing services segment | 18% | 21% | 21% | 21% | 23% |
| TOTAL GROUP by equity method | 10% | 10% | 12% | 13% | 12% |
| TOTAL GROUP by proportional consolidation | 11% | 10% | 11% | 11% | 11% |
MEDIA SEGMENT
The media segment includes Delfi operations in Estonia, Latvia and Lithuania as well as their parent company Delfi Holding. Starting from 1 March 2014, the operations of Delfi in Ukraine have been terminated. The EBITDA of Delfi Ukraine in the first quarter of 2014 also included expenses related to the termination of operations. The media segment also includes AS Eesti Ajalehed (publisher of Maaleht, Eesti Ekspress and Eesti Päevaleht), book publisher OÜ Hea Lugu as well as magazine publisher UAB Ekspress Leidyba in Lithuania, the latter having been merged with Delfi Lithuania on 1 July 2014.
This segment also includes joint ventures AS SL Õhtuleht (publisher of Õhtuleht and Linnaleht), magazine publisher AS Ajakirjade Kirjastus and home delivery company AS Express Post.
The EBITDA of Delfi Estonia, Latvia and Lithuania is now presented before any trademark royalties which are paid to their immediate parent company Delfi Holding.
News portals owned by the Group
| Owner | Portal | Owner | Portal |
| Delfi Estonia | www.delfi.ee | AS Eesti Ajalehed | www.ekspress.ee |
| rus.delfi.ee | www.maaleht.ee | ||
| Delfi Latvia | www.delfi.lv | www.epl.ee | |
| rus.delfi.lv | |||
| Delfi Lithuania | www.delfi.lt | AS SL Õhtuleht | www.ohtuleht.ee |
| ru.delfi.lt |
Classified portals owned by the Group
| Owner | Portal | Owner | Portal |
| Delfi Lithuania | www.alio.lt | AS Eesti Ajalehed | www.ej.ee |
| www.ekspressauto.ee |
| (EUR thousand) | Sales | ||
| Q1 2015 | Q1 2014 | Change % | |
| Delfi Estonia | 1 358 | 1 073 | 27% |
| Delfi Latvia | 676 | 494 | 37% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 1 739 | 1 753 | -1% |
| incl. online revenue of Delfi Lithuania | 1 208 | 1 155 | 5% |
| Delfi Ukraine | 0 | 2 | -100% |
| AS Eesti Ajalehed | 2 752 | 2 862 | -4% |
| OÜ Hea Lugu | 117 | 308 | -62% |
| other companies (Delfi Holding) | 0 | 0 | - |
| Intersegment eliminations | (61) | (78) | 23% |
| TOTAL subsidiaries | 6 581 | 6 414 | 3% |
| AS SL Õhtuleht* | 1 014 | 948 | 7% |
| AS Ajakirjade Kirjastus* | 1 018 | 960 | 6% |
| AS Express Post* | 638 | 584 | 9% |
| intersegment eliminations | (289) | (269) | -8% |
| TOTAL joint ventures | 2 381 | 2 224 | 7% |
| TOTAL segment by proportional consolidation | 8 963 | 8 637 | 4% |
| (EUR thousand) | EBITDA | ||
| Q1 2015 | Q1 2014 | Change % | |
| Delfi Estonia | 93 | 77 | 21% |
| Delfi Latvia | 43 | (64) | 167% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 116 | 173 | -33% |
| Delfi Ukraine | 0 | (51) | 100% |
| AS Eesti Ajalehed | 23 | 133 | -83% |
| OÜ Hea Lugu | 5 | 66 | -92% |
| other companies (Delfi Holding) | (1) | (1) | 0% |
| Intersegment eliminations | (0) | 5 | - |
| TOTAL subsidiaries | 279 | 338 | -18% |
| AS SL Õhtuleht* | 118 | 31 | 283% |
| AS Ajakirjade Kirjastus* | 73 | 10 | 626% |
| AS Express Post* | 88 | 84 | 6% |
| intersegment eliminations | (0) | 3 | -100% |
| TOTAL joint ventures | 279 | 128 | 119% |
| TOTAL segment by proportional consolidation | 558 | 466 | 20% |
*Proportional share of joint ventures
Delfi Estonia
- Growth in the number of live webcasts of Delfi TV. Major projects included the celebration of the anniversary of the Republic of Estonia for the third year running, election studios and debates of parliamentary elections, sports broadcasts, etc.
- Successful launch of a new topical portal www.lemmikloom.ee. Several new portals are being developed.
- Further development of www.zave.ee, a pan-Baltic portal of discount offers giving readers overview about discount offers made by local retailers.
- Setting up a joint sales time of Delfi and AS Eesti Ajalehed.
-
Other cooperation projects
- Media partner for the Schenker volleyball league,
- Media partner for the Schooldance festival, etc.
Estonian online readership 2014-2015
Delfi remains the largest internet portal in Estonia in the first quarter 2015. There are no substantial changes in competitive situation in Estonia. There is continuing trend of those internet users, who consume Delfi through mobile devices. As a result of this, the total amount of internet users increases and creates the situation where the percentage of the content consumed via mobile devices grows. Due to the latter, Delfi reached more than 1,8 million weekly browser views during the first quarter of 2015.
Delfi Latvia
- Continuation of rapid development of Delfi TV and live webcasts.
- Launch of the new pet portal www.MansDraugs.lv
- Expanded content in the health portal www.rutks.lv
- Launch of the mobile version for the forum of www.Cālis.lv, a family and home portal.
- Further development of www.zave.lv, a pan-Baltic portal of discount offers giving readers overview about discount offers made by local retailers.
- Media partner for several concert tours and artists.
Latvian online readership 2014-2015
Delfi again reached the No 1 internet portal position in January 2015. However inbox.lv overcame this position in February and March. Delfi remains still confidently number one news portal in Latvia, followed by Tvnet.lv. This is pretty much the competitive situation in Latvia – three biggest portals competing for the leadership. During 2014 January research company Gemius changed the methodology of the research and now the studied target group is in age of 7-74 instead of the previous 15-74 years.
Delfi Lithuania
- In January, news portal DELFI achieved record readership of 1.22 million users.
- In February, the readership of Delfi including all the topical portals amounted to a record 70% of the Lithuanian population.
- Delfi TV continued producing live webcast and streams, with a particular focus on basketball matches. Delfi has a long-term contract with the National Basketball League and Lithuanian Basketball Federation for broadcasting matches.
- Delfi acquired a licence of internet broadcaster. The company plans to produce more than thousand video streams this year.
- Launch of a new DIY portal www.daraupats.lt, targeted at all people who want to do things themselves.
- Launch of new health, motorsport and culture subsites under Delfi.
- In February, Delfi Lithuania celebrated its 15th birthday by hosting a grand client event.
Lithuanian online readership 2014-2015
Delfi remains the largest internet portal in Lithuania. In the first quarter of 2015 there are no substantial changes in the preferences of internet users. However competitive situation will become more tight in the future because of the acquisition of Tipro Group portals by MTG, who has mergered them all under tv3.lt. As a result www.tv3.lt became number three internet portals’ group in Lithuania.
Print-media in Estonia
Estonian newspaper circulation 2014-2015
The circulation of the Estonian newspapers is slowly declining over the longer period. Daily newspapers are losing more in circulations, weeklies less. There have been also substantial changes in circulations during the first quarter of 2015. Õhtuleht became the biggest newspaper in Estonia in March. The second biggest newspaper is Maaleht. To the above figures of the Ekspress Group publications one also needs to add the number of digital subscribers which totalled more than 11 thousands for both Eesti Ekspress and Eesti Päevaleht, as of the end of the first quarter of 2015.
Estonian newspaper readership 2014-2015
Similar to the circulations, newspaper readership has been fairly stable, however in a longer term the readership of the printed newspapers is declining ca 3-5% per year. As this study does not cover readership of digital subscribers, it does not give the whole picture of readership of newspapers. The subscribers of the Group’s digital newspapers exceed 11 thousand for both Eesti Päevaleht and Eesti Ekspress. Growing the amount of readers of digital newspapers remains the main task of the Group in recent years. The competition situation in the market has not substantially changed during the first quarter of 2015, but taking into consideration changes in circulation trends, the changes are also expected in the readership within this year.
PRINTING SERVICES SEGMENT
All printing services of the Group are provided by AS Printall which is one of the largest printing companies in Estonia. Printall is able to print both newspapers (coldset) and magazines (heatset).
| (EUR thousand) | Sales | ||
| Q1 2015 | Q1 2014 | Change % | |
| AS Printall | 6 318 | 7 062 | -11% |
| (EUR thousand) | EBITDA | ||
| Q1 2015 | Q1 2014 | Change % | |
| AS Printall | 1 161 | 1 459 | -20% |
Sanctions against Russia and the related decrease in orders and price pressure in Scandinavia caused the first-quarter sales revenue and EBITDA to fall as compared to the year earlier. Due to changes in the political landscape there have been changes in the structure of export markets where the share of Russia continues to decrease.
A new sheet-fed printing machine ordered last June was installed at the beginning of 2015. The acquired machine will be used for printing magazine covers, small-circulation magazines and advertising products. Approximately 2/3 of the acquisition cost is financed with a long-term loan.
Printing services and the environment
In addition to its very strong financial position, Printall also focuses on environmentally conscious production. Printall has been granted ISO 9001 management and ISO 14001 environmental certificates.
The Minister of the Environment of the Republic of Estonia and the waste managing company AS Ragn-Sells awarded Printall with the title of the Top Recycler of the Year, because the company recycles 95% of its waste.
The Nordic Council of Ministers has awarded Printall with the environmental label “The Nordic Ecolabel”, used to acknowledge the companies in the Nordic countries that use environmentally efficient production. Printall also has FSC and PEFC Chain of Custody (COC) certificates, which the company uses to promote a green way of thinking in the printing industry. Both of those certificates indicate compliance with monitoring and product production process requirements which are issued to businesses that comply with the requirements established by the FSC (Forest Stewardship Council) and the PEFC (Programme for the Endorsement of Forest Certification). A business that is issued these certificates helps to support the environmentally friendly, socially fair and economically viable management of the world’s forests.
Printall cares about the environment and uses green energy. The POWERED BY GREEN certificate is a proof that the company buys electricity, 70% of which has been generated by renewable sources of energy.
Consolidated balance sheet (unaudited)
| (EUR thousand) | 31.03.2015 | 31.12.2014 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 2 284 | 3 656 |
| Term deposit | 6 | 19 |
| Trade and other receivables | 7 297 | 6 519 |
| Corporate income tax prepayment | 75 | 37 |
| Inventories | 2 050 | 2 072 |
| Total current assets | 11 712 | 12 303 |
| Non-current assets | ||
| Term deposit | 0 | 1 600 |
| Trade and other receivables | 1 172 | 1 170 |
| Deferred tax asset | 65 | 65 |
| Investments in joint ventures | 694 | 500 |
| Investments in associates | 162 | 164 |
| Property, plant and equipment | 14 217 | 14 506 |
| Intangible assets | 46 100 | 46 287 |
| Total non-current assets | 62 410 | 64 292 |
| TOTAL ASSETS | 74 122 | 76 595 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 3 817 | 5 213 |
| Trade and other payables | 6 900 | 6 249 |
| Corporate income tax payable | 10 | 19 |
| Total current liabilities | 10 727 | 11 481 |
| Non-current liabilities | ||
| Long-term borrowings | 15 665 | 17 939 |
| Total non-current liabilities | 15 665 | 17 939 |
| TOTAL LIABILITIES | 26 392 | 29 420 |
| EQUITY | ||
| Share capital | 17 878 | 17 878 |
| Share premium | 14 277 | 14 277 |
| Treasury shares | (95) | (64) |
| Reserves | 1 470 | 1 440 |
| Retained earnings | 14 200 | 13 644 |
| TOTAL EQUITY | 47 730 | 47 175 |
| TOTAL LIABILITIES AND EQUITY | 74 122 | 76 595 |
Consolidated statement of comprehensive income (unaudited)
| (EUR thousand) | Q1 2015 | Q1 2014 |
| Sales revenue | 12 093 | 12 734 |
| Cost of sales | (9 795) | (10 223) |
| Gross profit | 2 298 | 2 511 |
| Other income | 107 | 116 |
| Marketing expenses | (553) | (440) |
| Administrative expenses | (1 288) | (1 536) |
| Other expenses | (21) | (58) |
| Operating profit | 543 | 593 |
| Interest income | 11 | 2 |
| Interest expense | (155) | (176) |
| Foreign exchange gains/(losses) | 0 | 36 |
| Other finance costs | (16) | (16) |
| Total finance income/costs | (160) | (154) |
| Profit on shares of joint ventures | 194 | 98 |
| Profit (loss) on shares of associates | (15) | (12) |
| Profit before income tax | 562 | 525 |
| Income tax expense | (6) | (22) |
| Net profit for the reporting period | 556 | 503 |
| Net profit for the reporting period attributable to: | ||
| Equity holders of the parent company | 556 | 503 |
| Other comprehensive income (expense) that may be subsequently reclassified to profit or loss | ||
| Currency translation differences | 0 | (36) |
| Total other comprehensive income (expense) | 0 | (36) |
| Comprehensive income (expense) for the reporting period | 556 | 467 |
| Attributable to equity holders of the parent company | 556 | 467 |
| Basic and diluted earnings per share | 0.02 | 0.02 |
Consolidated cash flow statement (unaudited)
| (EUR thousand) | Q1 2015 | Q1 2014 |
| Cash flows from operating activities | ||
| Operating profit for the reporting year | 543 | 593 |
| Adjustments for: | ||
| Depreciation, amortisation and impairment | 695 | 736 |
| (Gain)/loss on sale and write-down of property, plant and equipment | 0 | (3) |
| Change in value of share option | 30 | 34 |
| Cash flows from operating activities: | ||
| Trade and other receivables | (820) | 275 |
| Inventories | 22 | 229 |
| Trade and other payables | 661 | (1 387) |
| Cash generated from operations | 1 131 | 477 |
| Income tax paid | (39) | (47) |
| Interest paid | (155) | (176) |
| Net cash generated from operating activities | 937 | 254 |
| Cash flows from investing activities | ||
| Term deposit (placement)/release | 1 600 | 0 |
| Interest received | 11 | 2 |
| Purchase of property, plant and equipment | (220) | (175) |
| Proceeds from sale of property, plant and equipment | 1 | 4 |
| Loans granted | - | (20) |
| Loan repayments received | 1 | 1 |
| Net cash used in investing activities | 1 393 | (188) |
| Cash flows from financing activities | ||
| Finance lease repayments | (20) | (18) |
| Change in use of overdraft | (1 117) | 0 |
| Repayments of bank loans | (2 533) | (914) |
| Purchase of treasury shares | (31) | 0 |
| Net cash used in financing activities | (3 702) | (932) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (1 372) | (866) |
| Cash and cash equivalents at the beginning of the year | 3 656 | 2 111 |
| Cash and cash equivalents at the end of the year | 2 284 | 1 245 |
Additional information:
Gunnar Kobin
Chairman of the Management Board
GSM: +372 5188111
e-mail: gunnar@egrupp.ee
