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METRO INTERNATIONAL: FINANCIAL RESULTS FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED 31 DECEMBER 2005

15 February 2006

Luxembourg, 15 February 2006 - Metro International S.A. ("Metro") (MTROA, MTROB), today announced its preliminary financial results for the fourth quarter and twelve months ended 31 December 2005.  The Group's consolidated accounts have been prepared according to International Financial Reporting Standards (IFRS).

TWELVE MONTHS ENDED 31 DECEMBER 2005

  • 19% year on year increase in net sales to US$ 359.7 million (US$ 302.4 million)
  • 19% year on year increase in average daily circulation of subsidiary operations to 4.9 million daily copies
  • Operating loss of US$ 2.5 million (US$ 7.7 million) including US$ 15.9 million net profit from sale of minority interest in Metro Boston
  • 10 out of 17 country operations report operating profits
  • Net loss of US$ 7.0 million (US$ 8.7 million)
  • Weighted average basic loss per share of US$ 0.01 (US$ 0.01)

FOURTH QUARTER ENDED 31 DECEMBER 2005

  • 6% year on year increase in net sales to US$ 101.3 million (US$ 95.4 million)
  • 13% year on year sales growth at constant exchange rates
  • 22% year on year increase in daily readership to 18.5 million
  • Operating profit of US$ 5.5 million (US$ 5.4 million)
  • 11 out of 17 country operations report operating profits
  • Net profit of US$ 5.9 million (US$ 5.7 million)
  • Weighted average basic profit per share of US$ 0.01 (US$ 0.01)

Pelle Törnberg, President and CEO of Metro International, commented: "2005 was a year of substantial investment for Metro, with the launch of seventeen new editions and the expansion of Metro's footprint into 23 new cities with populations of more than 200,000 people.  Metro is now a national or multi-city media in all of the seventeen country markets in which we have subsidiary or associate operations, and Metro is the highest circulation or most read newspaper in four of these markets.  These investments, which led to a 19% year on year increase in the average daily circulation in 2005, have strengthened Metro's market position and are expected to yield significant returns moving forward, but they also adversely affected the Group's operating results in 2005. We are however now in a good position to focus on the clear priority of delivering group profitability in 2006.

"Metro's underlying sales growth at constant exchange rates in the final quarter of the year was more than double the reported level, which reflected the strengthening of the US dollar during 2005 against the majority of our reporting currencies. Nevertheless, fourth quarter year on year sales growth of 13% at constant exchange rates did not meet our expectations and reflected an underperformance in certain operations, which we have already taken measures to correct.

"2005 featured a combination of some strongly outperforming operations and some that failed to deliver on expectations.  Metro France moved into annual profitability for the first time and reported a 25% margin in the fourth quarter; Metro Holland's fourth quarter margin increased to 27%; Metro Denmark achieved a full year margin of 19%; and Metro Hong Kong reported an increased margin of 30% for the twelve month period.

"Our Spanish operations, however, disappointed as we continued to make far reaching changes to the organization.  The financial under-performance in the quarter and for the full year was the result of the previously disclosed mismanagement, as well as substantial circulation rises necessitated by increased competition.  Metro Spain reported a US$ 3.5 million negative year on year swing in profitability in the fourth quarter, and a US$ 9.6 million negative swing for the full year, with the operations making losses for both periods.  We have taken actions throughout the year to resolve the issues.  The introduction of new management, as well as a strengthening of the market position through increased circulation and extended penetration, is expected to enable the operation to return to a healthy level of profitability in 2006. The restructuring resulted in one-off charges to the profit and loss account of US$ 4.1 million during 2005.  The company's operating cost base has now been reduced to a competitive level, readers per copy are rising and Metro Spain has made a most encouraging start to 2006 with local currency sales up by over 30% year on year in January." 

 

SUMMARY

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:                  +44 (0) 20 7162 0025

Sweden:           +46 (0) 8 5052 0110  

US:                  +1 334 323 6201        

A replay facility will also be made available via the Company's website at www.metro.lu.  

Metro's financial results for the first quarter and three months ended 31 March 2006 will be published on 25 April 2006.

This interim report has not been subject to review by the Company's auditors.

Luxembourg, 15 February 2006.

The Board of Directors

Metro International S.A.

11 Boulevard royal

L-2449, Luxembourg

For further information, please visit www.metro.lu, email info@metro.lu or contact:

Pelle Törnberg, President & CEO                     tel: +44 (0) 20 7016 1300

Rob Newman, Corporate Communications       tel: +44 (0) 20 7321 5029

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