Quarterly report fourth quarter 2005

Download Keyfigures

General:
The Norges Handels og Sjøfartstidende (NHST) Group’s pre-tax profit for the fourth quarter was MNOK 4.9 as against MNOK 7.4 in the corresponding quarter lat year. The profit is marked by a relatively extensive increase in sales and editorial costs. In addition, new publications were launched in the period and these are taken to expense. The turnover increased in the fourth quarter by 11 per cent, to MNOK 205.9. All the publications saw a growth in turnover. The most remarkable thing compared with other media houses is that all the NHST newspapers experienced circulation growth, and at record levels at that. This is important strategically to NHST, which is experiencing a boom, both in Norway and globally in the segments in which NHST is operating. At the same time, clear progress is being made in all activities on the internet, and there is a relatively extensive business development going on.

For the year 2005 (preliminary accounts) there was a pre-tax profit of MNOK 45.0 as against MNOK 42.9 in 2004. The Group’s turnover increased by 11 per cent to MNOK 741.5. All the publications strengthened their market positions through the year. The globally-oriented activities are developing particularly well.

Publication by publication

Dagens Næringsliv’s operating profit dropped from MNOK 14.9 to MNOK 11.9. The setback is due to increased costs for editorial and market-related activities, which have been incurred so as to strengthen DN’s position in the reader market. .These measures were carried out throughout the year but most forcefully during the last quarter. The effect of the measures has been a clear increase in the circulation of DN, particularly during the last months of 2005.

Apart from helping to develop DN qualitatively, these measures are expected to be profitable for the coming quarters. The National Association of Media Companies (Mediebedriftenes Landsforbund) will be publishing the circulation figures for Norwegian newspapers on 17 February. Here DN will be able to refer to a solid growth in circulation. DN has a good turnover of adverts, and is in line with the market as such. Particularly the Vacancies and Property advertisements are developing well. DN’s profit for the year amounted to MNOK 55.3 as against MNOK 57.4 in 2004. The turnover increased by seven per cent to MNOK 438.4. An increase in the operating profit is expected for DN in the coming quarter.

DN Nye Medier increased its operating profit by 36 per cent to MNOK 1.3 during the quarter. For the year, the operating profit was MNOK 2.1 as opposed to a deficit of MNOK 2.1 in 2004. Consequently, the year 2005 was the first year that dn.no saw a profit – five years after it was launched. Turnover increased in the quarter by 24 per cent to MNOK 9.5. The turnover for the year increased by 28 per cent to MNOK 29.4. The growth in traffic for dn.no is good at approximately 35 per cent for the year. Dn.no’s technical platform is now established as a common platform for most of the Group’s internet activities. Further progress is expected to be mad in the next quarter.

TradeWinds’ operating profit increased by MNOK 0.5 to MNOK 0.6 in the quarter. Turnover increased by 22 per cent, to MNOK 18.9. Circulation has increased to an all time high and the circulation at year-end was 7,764. Among the major shipping nations, Greece has seen the greatest growth in circulation. There is also solid growth for Trade Winds in connection with China. The operating profit for the year was MNOK 3.0, which is twice that of last year. Turnover increased by 14 per cent to MNOK 70.9. The results are expected to continue upwards for Trade Winds in the coming quarters.

Upstream’s operating profit was MNOK 0.2 for the quarter as opposed to a deficit of MNOK 0.7 last year. Turnover increased by 12 per cent to MNOK 14.1. Circulation reached an all time high at 6,100. The USA and several Asian countries like China experienced the highest growth. The operating profit for the year reached MNOK 1.7 as opposed to a deficit of MNOK 2.5 last year. For Upstream therefore, the year 2005 was the first time it saw a surplus, nine years after start-up. Solid growth is expected for the coming quarters, not least as a result of increased prospecting and other activities in the oil business.

Intrafish Media had a deficit of MNOK 0.8 in the quarter as against a deficit of MNOK 0.7 last year. Turnover fell by 1 per cent to MNOK 11.6 for the quarter. For the year as a whole there was a deficit of MNOK 3.6 as against a deficit of MNOK 4.3 in 2004. Turnover for the year increased by 2 per cent to MNOK 43.5. It is clear that Intrafish’s customers are doing better financially and this is expected to improve the results for Intrafish in the coming quarters.

Nautisk Forlag saw a profit of MNOK 0.7 in the quarter as opposed to a deficit of MNOK 0.5 last year. Nautisk’s turnover fell by MNOK 0.4 to MNOK 19.4. The setback is partly due to greater extent of customer credits, which was taken to income earlier on. Adjusted for one-off effects, Nautisk is therefore still making ”underlying” progress but less so than before. The operating profit for the year was MNOK 5.9 against MNOK 6.1 in 2004. Turnover increased by 14 per cent to MNOK 84.2. A moderately improved performance is expected for Nautisk in the coming quarters.

TDN Nyhetsbyrå had a growth in turnover of 13 per cent in the quarter, to MNOK 2.9. The profit for the quarter was MNOK 0.2 as against MNOK 0.0 last year. The turnover for the year increased by 4 per cent to MNOK 10.3. The operating profit was MNOK 1.2 as against MNOK 0.5 last year. TDN is expected to continue improving its performance.

Europower increased its turnover by 92 per cent to MNOK 3.0. The operating profit improved by MNOK 0.3 to a deficit of MNOK 1.1. Turnover for the year increased by 60 per cent to MNOK 10.2. The growth in turnover is partly due to organic growth but mostly it is due to the acquisition of Energi Forlag. The operating result for the year improved by MNOK 0.1 to a deficit of MNOK 2.6. A reduced deficit is expected for the coming quarters. New business activities There are a number of activities going on within web TV, search, databases, and publication-related niches. The investment in IT/Telekom and in web TV via Dagens IT and Smartcom respectively has been successfully established. Dagens IT will come out as a newspaper every fortnight (fourteen days) and the website dagensit.no has been established in interaction with dn.no. In the web TV field the number of broadcasts watched by many people have been stepped up. In isolation for the quarter, these activities shave produced an operating deficit of MNOK 2.3. For the year as a whole, the deficit is MNOK 3.8. A solid improvement in the performance is expected in the coming quarters, and as the activities attach a certain size, they will be reported separately.

In conclusion
The year 2005 has provided solid growth in the Group’s size and turnover. This has strengthened NHST’s competitive power and is a major reason why the Board is expecting growth in the operating profits in the coming quarters. The core of NHST’s strategy is to be the best in business news in Norway and world leader in the three media segments: shipping, oil and seafood. The combination of an established market position and ditto strategy is another important reason to aim for further growth and improved profit performance in the coming quarters.

10th February 2006

The Board of Directors AS Norges Handels og Sjøfartstidende