Publigroupe: Profit slump in the first half-year
The slump in advertising during Euro 2008 and the economic slowdown hit Publigroupe hard in the first half of 2008. Net income plummeted by 24.8 percent to 43.9 million Swiss francs. Consolidated revenue, however, still grew by 3.1 percent to 1.11 billion Swiss francs.
The advertising slump during the Euro 2008 and the economic slowdown hit Publigroupe hard in the first half of 2008. Net profit plummeted by 24.8 percent to CHF 43.9 million. According to a press release issued by the advertising marketer on Monday, many companies refrained from placing press advertisements during the major event. Group sales still grew by 3.1 percent overall to 1.11 billion Swiss francs. Adjusted for acquisitions, however, there was a decrease of 7.2 percent.
The operating result (EBIT) improved by 65.5 percent to CHF 61.9 million. However, this includes extraordinary income from the sale of an office property in Zurich (CHF 42.5 million). Excluding one-off special effects and changes to the scope of consolidation, EBIT fell by CHF 11.6 million compared to the same period of the previous year.
Since the spring, the financial crisis has begun to have a negative impact on the international advertising markets, explained Publigroupe Group CEO Hans-Peter Rohner in a telephone conference, according to SDA. The largest division, Media Sales, which covers all traditional media marketing, suffered a 7.1 percent drop in sales to CHF 925 million in the first half of the year. In Switzerland, the decline even amounted to 8.1 percent.
Savings programs planned - better result expected for the second half of the year
Publigroupe now intends to take various measures to counteract the slump in profits. According to the conference call, three cost-cutting programs - one for administration and two in the Media Sales segment - are in preparation across the Group. For next year, these programs should result in savings of CHF 10 million, CFO Andreas Schmidt specified the targets. He expects a positive effect of around CHF 2.5 million in the current period.
For the second half of the year, Publigroupe expects to achieve a better operating result than in the first half. Previously, the Group expected to achieve double-digit sales and earnings growth for the year as a whole, excluding any further acquisitions.
Publigroup shares recorded losses. Investors were not convinced by the half-year figures. In the meantime, the shares were up. By midday, however, the shares were down 1.7 percent at CHF 243.
(Hans-Peter Rohner, CEO Publigroupe / Keystone, Laurent Gillieron)
The operating result (EBIT) improved by 65.5 percent to CHF 61.9 million. However, this includes extraordinary income from the sale of an office property in Zurich (CHF 42.5 million). Excluding one-off special effects and changes to the scope of consolidation, EBIT fell by CHF 11.6 million compared to the same period of the previous year.
Since the spring, the financial crisis has begun to have a negative impact on the international advertising markets, explained Publigroupe Group CEO Hans-Peter Rohner in a telephone conference, according to SDA. The largest division, Media Sales, which covers all traditional media marketing, suffered a 7.1 percent drop in sales to CHF 925 million in the first half of the year. In Switzerland, the decline even amounted to 8.1 percent.
Savings programs planned - better result expected for the second half of the year
Publigroupe now intends to take various measures to counteract the slump in profits. According to the conference call, three cost-cutting programs - one for administration and two in the Media Sales segment - are in preparation across the Group. For next year, these programs should result in savings of CHF 10 million, CFO Andreas Schmidt specified the targets. He expects a positive effect of around CHF 2.5 million in the current period.
For the second half of the year, Publigroupe expects to achieve a better operating result than in the first half. Previously, the Group expected to achieve double-digit sales and earnings growth for the year as a whole, excluding any further acquisitions.
Publigroup shares recorded losses. Investors were not convinced by the half-year figures. In the meantime, the shares were up. By midday, however, the shares were down 1.7 percent at CHF 243.
(Hans-Peter Rohner, CEO Publigroupe / Keystone, Laurent Gillieron)
