Independent News & Media (INM) today reported a net profit of €12.1 million, excluding exceptional items in the the six months ended 30 June 2009 - - H1 2009; diluted earnings per share excluding exceptional items of 1.4 cent; including exceptional items (chiefly, masthead impairments), INM reported a loss after tax and minority interests of €53.8 million.
On Thursday, INM announced it had secured another agreement with its banks and bondholders which gives it more time to agree a deal on a €200m bond. A statement from the firm said the so-called "standstill' agreement, which expired yesterday, had been extended until September 25th. INM said the extra time would enable "constructive" discussions about the group's financial restructuring.
Group revenue of €608.8 million declined by 14.9% on 2008 in constant currency terms and total advertising revenues were down by 19.6% but circulation revenues remained robust with a moderate decline of 0.1% in constant currency terms
Operating profit of €73.2 million for the first half delivered an operating margin of 12.0% - - ranking at the top end of INM's peer group, according to the firm.
Exceptional costs of €86.8 million - - were primarily related to non-cash impairment charges of €71.8 million, mainly arising on the value of the group's intangible assets (i.e. mastheads) as a consequence of the continuing economic downturn
INM said the significant decline in advertising needs to be viewed against an extremely weak global advertising climate and a relatively good H1 2008 advertising performance. Although advertising revenue was weak in H1 2009, the trend was reasonably steady and the outlook remains consistent with that trend.
INM says despite a weak economic environment, circulation revenues were flat in H1 2009 reflecting cover price increases on selected titles, offset by marginal volume declines. INM's overall revenue strategy has been to maintain or grow market share and actively manage yields.
In light of INM's aim to deleverage its balance sheet, the directors have not proposed recommending an interim pidend for 2009.
Commenting on these results, Gavin O'Reilly, group chief executive officer said: "Against a backdrop of exceptionally difficult business conditions, INM is reporting a comparatively resilient revenue performance. A continuing and highly effective focus on operating cost reduction together with a series of business process improvements have yielded significant benefits within the period. As a consequence, any improvement in broader market conditions should translate to good earnings growth and operating margins.
"The directors note that it is difficult to forecast the full year result with absolute certainty in an environment where key advertising categories still remain depressed, particularly in Ireland and the United Kingdom. The group's current forecast presumes a continuation of poor advertising markets to year-end, with no material pick up from the trend experienced in the first half, save seasonal trends in the run-up to Christmas. Accordingly, and dependent on no further deterioration in advertising conditions, the group forecasts operating profit before exceptionals for 2009 to be at the lower end of the range provided in June 2009 of €180 million to €210 million."
Results detail
