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Metro International S.A. is a Luxembourg limited-liability company
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METRO INTERNATIONAL S.A.: FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED 31ST MARCH 2007
23 April 2007
Luxembourg, 23rd April 2007 - Metro International S.A. ("Metro") (MTROA, MTROB), today announced its financial results for the first quarter ended 31st March 2007. The Group's consolidated accounts have been prepared according to International Financial Reporting Standards (IFRS).
HIGHLIGHTS FOR Q1 2007
- Net sales increased by 10% to US$ 102.5 million (2006: US$ 93.2 million). In real terms, excluding divested operations, the sales growth was 5.5%
- Group operating loss of US$ 11.5 million (2006: US$ 3.9 million loss).
- Contribution from subsidiary and associate newspaper operations: operating loss of US$ 4.2 million (2006: US$ 1.5 million profit)
- The average margin on operations older than 3 years increased to 14.5% compared to 12.9% in 2006
- Net HQ costs of US$ 6.8 million (2006: US$ 5 million)
- Net loss of US$ 14.3 million, (2006: US$ 5.7 million loss).
- Basic earnings per share of US$ (0.02) (2006: US$ (0.01)).
Pelle Törnberg, President and CEO of Metro International, commented:
"The first quarter is a seasonally weak quarter for Metro International and is usually loss making. However, the first quarter 2007 results also reflect the disappointing performance in some of our key markets, such as Sweden, Spain, France and the US. We also increased HQ and Online investment, and increased circulation by 10% over the quarter."
"We are disappointed, therefore, to report an operating loss for Q1 07 of US$11.5 million against an operating loss for Q1 06 of US$3.9 million. On a like for like basis, excluding investment in new businesses and one off costs, the Q1 07 operating loss was $5.1 million."
"Performance problems in Sweden were identified in early 2007 and these were reinforced in the March figures. This is primarily due to loss of sales staff and inadequate management focus plus severe under-performance of the Bostad edition. As a result, we have undertaken management restructuring and a review of the Swedish operations during the past quarter, and we will continue that overhaul with the aim of improving margins and restoring the Swedish operations to be the centre of excellence and benchmark for cost control and growth across the Group."
"Performance in Spain has been affected by price pressures in Madrid. In France the 40% circulation increase combined with temporary weaker advertising market in certain key segments affected performance negatively. The US market underperformed our expectations due to tough local market conditions."
"Metro continues to invest in building our global business with new editions in Mexico, Portugal, Sweden, Canada and Brazil. Increased circulation in Sweden and France in Q3 06 and our investment in Online will deliver higher ad revenues later in 2007, but these investments dilute our financial performance in Q1 07 compared to Q1 06 by $4.5 million. As explained in our Q4 release we are also investing in the HQ structure including Global Sales, the IT team and senior executives to drive the business forward."
"In Q1 we also report the impact of the one-off Polish closure costs of $1.7 million which create a negative variance of $0.9 million against 2006. This will be profit enhancing in later quarters."
"We saw strong performance from our operations in Chile, Hong Kong, Portugal, and Holland as revenue and margins increased substantially over the quarter."
"On 16th April 2007 the Swedish government announced that retroactively from 1st January 2007, free newspapers will pay the lower rate of advertising tax of 3% on gross sales. This will represent a saving on the current rate of 8% charged on net sales, less distribution costs and has not been factored into our Q1 07 results. But it will have a positive impact on our Swedish results in future quarters."
"We are encouraged by the 14.5% margins in the more than three year old editions for Q1 07 against the 12.9% we saw in Q1 06."
"Metro's ambition will continue to focus on extending our global footprint in the free newspaper industry with the associated improvement in margins and profitability."
For further information, please visit www.metro.lu, email info@metro.lu or contact:
Pelle Törnberg, President & CEO tel: +44 (0) 20 7016 1300
Metro is the largest and fastest growing international newspaper in the world. Metro is published in over 100 major cities in 20 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 41% since the launch of the first edition in 1995.
Metro International S.A. 'A' and 'B' shares are listed on the Stockholmsbörsen 'MID CAP-List' under the symbols MTROA and MTROB.
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 8817 9301 |
| Sweden: | +46 (0) 8 505 202 70 |
| US: | +1 718 354 1226 |
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: