Quarterly report second quarter 2005

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The Norges Handels og Sjøfartstidende (NHST) Group’s profit before tax in the second quarter amounted to NOK 35.8 m as against NOK 29.5 m in the corresponding period last year (+21%). The operating profit improved by 25% to NOK 35.5 m. The accumulated operating profit for the first quarter was NOK 42.8 m as against NOK 35.5 m last year. The profit before tax improved in the first quarter by 18% to NOK 44.2 m. Generally speaking the good trend continued in all the subsidiaries. The progress made by dn.no and Upstream is particularly noteworthy. The profit improvement for the Group was the thirteenth in a row since the summer of 2002.

The turnover for the NHST Group increased by 15% in the quarter, to NOK 193.4 m. There was a stronger increase in turnover over the quarter, and June in particular was a good month for sales. This shows that the many new pro-active marketing steps that were taken in the quarter were well received by the customers and has had a speedy effect. The market situation for the publications continues to be good against the background of the boom in Norway and in the three global niche industries shipping, oil and seafood.

Accumulated for the first six months the growth in turnover was 11%, and the turnover amounted to NOK 365.6 m. The growth in turnover was on the increase in Dagens Næringsliv (DN) (+12% in the quarter). At the same time it was the other companies in the Group that had the highest growth in turnover (+20%) in the quarter. The substantial growth in the circulation continued for all the publications, and generally speaking, the circulations and the readership reached an all time high, and market share was captured in the reader market. The main reason for the growth in turnover was, however, the increase in the number of advertisements and the sale of more maritime draught publications. On the whole, the order books for the coming months are relatively full, but when it comes to advertisements, there is little certainty beyond one month ahead.

Two companies were acquired in the period in question. These are commented on below. NHST is, moreover, listed on the so-called OTC list and the price trend may be read under AS Norges Handels og Sjøfartstidende. This report has been prepared according to NGAAP – as in previous periods. NHST will consider whether to go over to IFRS in the course of the year.

Publication by publication:

Dagens Næringsliv (DN) returned an 11% growth in the operating profit in the quarter, from NOK 27.8 m to NOK 30.9 m. Turnover increased in the quarter from NOK 104.4 m to NOK 116.5 m (12%). The growth in turnover is primarily due to an increase in advertisement sales.

Particularly Vacancies and advertisements aimed at consumers grew considerably. DN’s circulation continued to grow, and particularly casual sales and DNLørdag (DN Saturday) continue to rise. With the new MBL parameters for measuring circulation, which means counting the number of newspapers sold as bulk to airlines in a better way, DN’s circulation for the year is expected to reach an all time high at 73,000 plus. Costs increased by 12% in the quarter, and this was due to increased effort and investment in editorial and marketing activities. A lower cost level is expected in the coming quarters. The accumulated profit for the first six months of the year was NOK 40 m – at last year’s level. The turnover after [the first] six months increased by six per cent to NOK 216.2 m. A moderate increase in operating profit is expected in the coming quarters compared with last year.

DN Nye Medier’s turnover in the quarter increased by 32% to NOK 6.7 m. The operating profit was NOK 0.8 m as against a loss last year of NOK 0.5 m. The improvement is due to the fact that the company is managing to combine almost constant costs with good growth in income for all the advertisement segments. The improvement in Vacancies and Executive Positiions was particularly solid. Traffic grew by just over 30%. A new service has recently been launched whereby it is possible to read business news or get tips on wines over one’s mobile phone – see http://www.dn.no/mobil/.

”IT-avisen business” (the IT newspaper business) was bought from Aller on 12 June 2005. The new activity is managed from DN Nye Medier, but will be organised as a separate limited company. This new ICT effort will get a new name and a new website for the ICT industry will be launched sin the course of the third quarter this year. Neither turnover nor profit/loss for IT-avisen business has been taken into consideration in the reported figures, but they do not make up a sizeable amount. Accumulated for the first six months DN Nye Medier has a surplus of NOK 1.4 m as against a deficit of NOK 1.7 m last year. The upswing is expected to continue in the coming quarters.

TradeWinds saw a growth of NOK 0.7 m in its operating profit, to NOK 1.7 m for the quarter. Turnover increased by 13% to NOK 18 m. This improvement came despite the clearly negative consequences of the weaking of the USD compared with last year. The circulation is the highest ever with more than 7,500 subscribers. The month of June was good for with considerable successful activities in connection with Nor-Shipping. Among other things, a successful shipping conference was organised in Oslo. Accumulated for the first six months the operating profit was NOK 2.3 m as against NOK 1.8 m last year. Turnover increased by 13% to NOK 37.2 m. There is a good order reserve for the rest of the year and in view of the good growth in circulation the situation is right for further improvement in the coming six months. TradeWinds will have been in business for 15 years in October and this will be marked in the shipping capitals of the world.

Upstream reached a landmark after the first six months. With an operating profit of NOK 1.0 m this was the first time it was in positive territory during the period in question. Upstream is in its ninth year of operation. Last year there was a loss of NOK 1.5 m for the first six months. There was a 13% growth in turnover for the first six months, reaching NOK 26.8 m. In the second quarter Upstream had a surplus of NOK 1.6 m as against a deficit of NOK 0.4 last year. Turnover increased by 19% to NOK 15.1 m. Particularly the edition focusing on Russia contributed to a growth in advertisements for Upstream in the period in question. Its circulation, with 5,900 subscribers, is the highest ever, and the growth in the USA and Asia is good. There is a good order reserve for the coming quarters, and profits accumulated for the year are expected

IntraFish Media grew by 11 % in turnover, to NOK 11.2 m in the quarter. For the first time there was a profit, of NOK 0.4 m, as against a loss of NOK 0.6 m last year. The turnover and the operating result for the period was somewhat better than expected. Both the international and the Norwegian publications returned a good growth. The newspaper Fiskaren, which returned a poor result for the first quarter, did well in the second quarter. Both Fiskaren and IntraFish are growing in number of subscribers. Accumulated for the first six months, turnover grew by 7% to NOK 21.3 m. The operating loss was almost halved compared with last year, down to NOK 1.4 m. It is expected that IntraFish Media will continue its upward trend in the coming quarters, but there is a risk since the industry is cyclically very sensitive. However, on the whole there is more optimism in the seafood and fisheries industry now than there was last year.

Nautisk Forlag’s operating profit dropped NOK 0.3 m to NOK 2.5 m in the quarter. Turnover increased by 35%, however, to NOK 23 m. For the first six months there was a growth in turnover of 30%, to NOK 37.2 m and a 10% growth in operating profit to NOK 5.2 m. It is the figures for the first six months that best describe the running of the business. The trend is that Nautisk Forlag is continuing to capture market share in international shipping but that the margins are under pressure. However, an operating margin of 12% after six months is satisfactory. A new sales office in addition to other NHST business has now been established in Singapore. Growth in turnover is expected to be somewhat slower in the coming quarters, but the level of the operating margin is expected to be the same

TDN Nyhetsbyrå continued its stable development in both turnover and operating result. The turnover in the quarter was NOK 2.4 m and the operating profit was NOK 0.5 m. For the first six months the turnover was NOK 4.8 m and the operating profit was NOK 0.6 m. In the time ahead, a moderate growth is expected in turnover and operating profit. There is steadily increasing integration between TDN and dn.no.

Europower also had stable turnover and operating result. The turnover in the quarter was NOK 1.7 m and there was an operating loss of NOK 0.1 m. The turnover for the first six months was NOK 3.4 m and there was an operating loss of NOK 0.7 m. The acquisition of Energi Forlag was carried out in the course of the second quarter. It was well received by the market. This is expected ti increase Europower’s turnover and improve its result fairly promptly. Energi Forlag’s accounts will be reported in connection with the third quarter accounts.

In conclusion:

The second quarter is usually the best quarter in the year. It was therefore very satisfying to see the trend in both turnover and profits in the second quarter. The improvement was so solid that it is assessed as being stronger than the trend in the market as such. The emphasis in the further development of the business is on continuing the good editorial performance, the pro-active work in the market, and sober operations. It is assumed that the boom will continue in the months ahead. The growth in turnover in the coming months is expected to be somewhat lower in the second quarter, whereas the improvement in operating profits is expected to continue.



Oslo, 23rd August 2005

The Board and CEO of AS Norges Handels og Sjøfartstidende