Analytics, Estonia, Financial Services, Good for Business

The EBITDA increased 23% year-on-year and the net profit figure was 33% higher compared to last year same period.

The results for the second quarter include the settlement of legal expenses in the amount of ca EUR 50 thousand related to the legal dispute regarding the ownership of the shares of AS SL Õhtuleht and AS Ajakirjade Kirjastus that ended in June. After normalising the result with regard to these expense claims, EBITDA was EUR 2.89 million and the net profit was EUR 1.81 million in the second quarter. The EBITDA of the first-half year amounted to EUR 4.39 million and consolidated net profit totalled EUR 2.36 million. After normalising the first-half year result with extraordinary expenses from the first and second quarters, the group earned EUR 4.64 million in EBITDA and EUR 2.61 million in net profit.

The above figures include all of the company's 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 shall be recognised under the equity method, in compliance with new international financial reporting standards (IFRS). The change in these accounting policies did not affect the net profit, but decreased the second-quarter revenue by approximately EUR 2.2 million and the EBITDA by approximately EUR 0.27 million (first-half year sales revenue was approximately EUR 4.3 million lower and EBITDA was approximately EUR 0.4 million lower).

The main cause for good economic results was significant growth of both the online media segment and the periodicals segment as compared to last year.

In the online media segment, the EBITDA improved more than 30% and the result of the periodicals segment improved more than 120%.

In the online segment, the biggest profit growth was posted by Delfi Estonia, exceeding last year’s result by 63% and earning approximately EUR 300 thousand in EBITDA. The EBITDA figure of Delfi Latvia increased 93%, but was almost three times lower than in Delfi Estonia in absolute figures. The profit of Delfi Lithuania increased 7%.

In the periodicals segment, AS Eesti Ajalehed and AS Ajakirjade Kirjastus posted the strongest result, increasing their EBITDA by 165% and 96%, respectively, as compared to the second quarter in 2013.

In the printing services segment, although revenue increased, but because of price pressure and appreciation of production inputs, EBITDA remained 4% lower than a year earlier. In the market of printing services, the result was greatly affected by the Ukraine crisis that has reduced the share of Russian orders in the company’s revenue from 11% a year ago to 7% this year. At the same time the share of Finland’s orders has increased from 12% to 18%.

In the third quarter, the company expects consolidated sales revenue and profit growth

around 4 -5%. In the last quarter, revenue growth should also be in the same range, but the company expects to increase the profit notably more.