Net loss for 365 hf previously Dagsbrún hf was ISK 6.943 million
Impariment loss and share in loss of assciates of discontinued operations amounted to ISK 5.933 million
The media and entertainment firm 365 hf reported yearly sales of ISK 11.096 million and a positive EBITDA of ISK 1.552 million. Net loss was ISK 6.943 million, and the net loss from continuing operations was ISK 1.227 million. It is necessary to point out that operational loss due to discontinued units such has the news station NFS, the newspaper DV and magazine publication was accounted for in 2006. For the fourth quarter the net loss was ISK 2.246 million and the profit from continuing opertions amounted to ISK 255 million. Sales for the fourth quarter was ISK 3.595 million and EBITDA was positive of ISK 1.362 million.
The period spanning the months October through December was the first reporting quarter for the firm 365 hf after the division of Dagsbrún hf into two entities 365 hf and Teymi hf. Operational division of the firm took place on October 1st 2006 as was announced on December 1st 2006. The numerous operations that are not included in the operation of 365 hf are set forth as discontinued operations in the income statement. The main operational entities are 365 media ehf, Sena ehf, Sagafilm ehf and D3 ehf. These aforementioned firms are subsidiaries.
Highlights:
" Yearly sales in 2006 amounted to ISK 11.096 million.
" Earnings before interest, tax and depreciation (EBITDA) amounted to ISK 1.552 million for the year.
" Profit from the sale of the broadcasting distribution system was recorded at ISK 1.586 million
" EBITDA excluding the profit from the sales of assets was negative by ISK 35 million for the year.
" In the fourth quarter the firm restructured its operations. The closure of the NFS news station, and the sale of DV newspaper and magazines were measures undertaken to improve the bottom line for 365 media ehf in the year 2007
" Net financial cost amounted to ISK 1.599 million, which includes a foreign exchange loss of ISK 685 million.
" Loss from continuing operations for the year amounted to ISK 1.227 million.
" Net loss amounted to ISK 6.943 million.
" Share of loss of associates and impairment loss for Daybreak Holdco of ISK 2.500 million was recorded in the fourth quarter.
" Shares in Daybreak Holdco the parent company of the UK based printing firm Wyndeham Ltd was reduced to 36% in the fourth quarter .
" Cash and cash equivalents were ISK 944 million at year end.
" Equity was ISK 6.137 and the equity ratio was 32,7% at year end
Ari Edwald CEO of 365 hf: "Results are not acceptable"
"Last year was an eventful year as the firm 365 hf and its predecessor Dagsbrún hf underwent many changes. These undertakings have proven to be time consuming and costly, in addition 365 hf has expensed losses due to impairment loss of earlier acquisitions that are no longer an integral part of the future operations of 365 hf. It is the management opinion that the results are not acceptable.
Regarding the on-going operations of 365 hf, the concentrated effort has mainly been on the restructuring f the operations of 365 media ehf. The main goal is to turnaround the operations. In the fourth quarter of 2006 the media firm sold the publishing rights of the newspaper DV to a newly established publishing firm and sold or discontinued 5 magazines. The daily newspaper Fréttablaðið and its add-ins, such as Markaðurinn, is now the only publication of the media firm. In the third quarter of 2006 the news station NFS was switched off, but the news department of Station 2 and the web site Visir.is was re-enforced instead. These changes are in accordance with our mission to retrench and focus on the core operations of 365 media ehf, which are newspaper publishing and broadcasting. The aim is to be a leader in the media sector and there is demand that all the operations return a profit except for development projects.
Consolidated financial statement for 365 hf (previously Dagsbrún hf.) for the 12 month period from January 1st to December 31st 2006
Standards of auditing and endorsements
The consolidated financial statements of 365 hf. have been prepared in accordance with International Financial Reporting Standards (IFRSs). The board of directors approved the financial statement on March 2nd 2007. The financial statement have been audited and signed without remarks by the group´s auditors KPMG.
Consolidated Income Statement
The operations of 365 hf is divided into two main segments, on one hand the print media and broadcasting sector which 365 media ehf operates, and the entertainment sector which includes Sena ehf, D3 hef and Sagafilm ehf.
Consolidated Income Statement
In ISK million 2006 2005 Change
Sales 11.096 7.033 4.063
Cost of services and goods sold (8.249) (4.641) (3.608)
Gross Profit 2.847 2.392 455
Other income 1.587 70 1.517
Operating expenses (3.557) (2.015) (1.542)
Results from operating activities (EBIT) 877 447 430
Net finance cost (1.599) (270) (1.329)
Share of loss of associates (net of income tax) (778) (77) (701)
Profit / (loss) before income tax (1.500) 100 (1.600)
Income tax expense 273 (43) 316
Profit / (loss) from continuing operations (1.227) 57 (1.284)
Discontinued operations (5.716) 661 (6.377)
Profit / (loss) for the year (6.943) 718 (7.661)
The tables below demonstrate sales and EBITDA for the last five quarters. Regarding EBITDA in the fourth quarter of 2006 it comprises the profit from the sale of assets amounting to ISK 1.586 m.kr as well as a onetime expenditure of ISK 110 m.kr. That cost is related to restructuring of the media firm.
Sales by segments
In ISK million 4Q 2005 1Q 2006 2Q 2006 3Q 2006 4Q 2006 2006
Printing and broadcasting 2.057 1.908 2.015 1.764 2.065 7.751
Entertainment 394 542 880 1.975 3.790
Eliminations (445)
Total 11.096
EBITDA by segments
In ISK million 4Q 2005 1Q 2006 2Q 2006 3Q 2006 4Q 2006 2006
Printing and broadcasting 98 61 109 (23) 1.493 1.639
Entertainment 57 68 131 51 306
Eliminations (394)
Total 1.552
Associates
In the fourth quarter the share in Daybreak Holdco was dilluted to 36% after the issue of shares. The book value of the share in Daybreak Holdco is recorded at ISK 2.572 million, after taking into account the share of loss and impairment loss of ISK 2.500 million in the fourth quarter. Regarding Hands Holding the share of loss of associates and impairment loss, the expensed amount reflected in the income statement was ISK 377 million in the fourth quarter. At year end the share in Hands Holding was at 30,7% and valued at ISK 1.649 million. The management team has decided to fully write down the share in the distribution firm Pósthúsið ehf, after accounting for the share in loss and impairment loss. Resulting in a net expense of ISK 375 million in 2006. These actions are taken to minimize risk.
Consolidated Balance sheet
Consolidated balance Sheet
In ISK million 31.12.2006 31.12.2005 Change
Assets
Non current assets 14.964 18.143 (3.179)
Current assets 3.805 4.667 (862)
Accoutns receivables 1.955 2.175 (220)
Total Assets 18.769 22.810 (4.041)
Equity and liabilities
Equity 6.137 8.770 (2.633)
Liabilities
Long term debt 6.465 8.802 (2.337)
Short term debt 6.167 5.238 929
Interest bearing debt 8.702 9.596 (894)
Liabilities total 12.632 14.040 (1.408)
Total Equity and Liabilities 18.769 22.810 (4.041)
At year end 2006 total assets are ISK 18.769 million compared to ISK 22.810 at year end 2005. As a side note the balance sheet from the previous year includes the telco sector which was transferred to the spin off company Teymi, as a result of the division of Dagsbrún hf on October 1st 2006.
Current ratio is 0,62 at year end 2006 compared to 0,91 at year end 2005. The equity ratio is 32,7%.
Interest bearing debt at year end 2006 was ISK 8.702 million compared to ISK 9.485 million on December 31st 2005. Cash and cash equivalents were ISK 944 million, hence the net interest bearing debt amounted to ISK 7.758 million at year end 2006 compared to ISK 8.934 million at year end 2005.
Consolidated Statement of Cash FLow
Consolidated Cash Flow
In ISK million 2006 2005
(Loss) / profit for the year (6.943) 718
Activities not influencing cash flow 6.413 (135)
Cash generated from operating activities (530) 583
Interest expense paid 417 180
Financial cost paid (1.453) (697)
Net cash from operating activites (1.566) 66
Investments activities (9.933) (138)
Financing activities 11.866 323
Net cash at the end of the reporting period 944 662
Net cash from operations was negative of ISK 1.566 million. Total cash used for investing activities within continuing operations was ISK 9.933 million, of which investments in operating assets was ISK 535 million. Cash from financing activities within continuing operations was ISK 11.866 million. Cash and cash equivalents was ISK 944 million at year end 2006
2007 Forecast
The management team considers the operating outlook for 2007 to be fairly good. The restructuring undergone in the latter part of 2006, including the closure of the newsstation NFS, and sale of the newspaper DV and magazines, was carried out to refocus on the core operations and to increase the efficiency. The main goal is to turn around the operations and to return a profit in 2007. This is a challenging assignment for the management team. Some of the obstacles to overcome are steadily increasing distribution costs for the newspaper Fréttablaðið. It is thought that these cost will continue to rise in the near future, arrangements have been made to simply the distribution system. In the beginning of 2007 fluctuations in advertising sales was noticed, advertising sales in the print media dropped whilst advertising sales in broadcasting improved. Concerning other opertions within firm the result has been adequate and no noticable shifts on the markets.
One of the main tasks for the management team is to lower the debt which now amounts to around 8 billions. The sale of shares in associates, the book value of which amounts to around 4,8 billion, is a crucial factor to that effect
At the present time it is not considered necessary to re- examine the budgeted revenues or EBITDA target for 2007
Presentation
A presentation meeting for shareholders and market participants will be held on March 5th, at 8:30 AM at the firm´s headquarters at Skaftahlíð 24 (basement in South house). Ari Edwald CEO and Viðar Þorkelsson CFO will present the company's annual results and operations
Dividend payments
The Board of Directors proposes not to pay dividends for the year 2006
Financial calendar
1. quarter Week 19 / 2007
2. quarter Week 32 / 2007
3. quarter Week 44 / 2007
4. quarter Week 6 / 2008
For further information contact:
Ari Edwald CEO or Viðar Þorkelsson CFO at the telephone number (+354) 550 5000
