Quarterly report fourth quarter 2002
Overview:
The Group's development continues to be marked by the economic situation, in which especially contracting advertising markets affect turnover and operating profits. Through a range of cost measures it has been possible to reduce costs more than the drop in income, and the quarter's operating profit is somewhat better than for the fourth quarter 2001. The progress from the third quarter of 2002 has therefore been maintained.
The globally targeted publications have their revenues primarily in USD and the strongly falling USD has had a negative impact on the development of revenues for these publications. Additionally there are clear differences in turnover patterns form company to company. All the subsidiaries in the Group have improved operating results.
Publication by publication:
Dagens Næringsliv a moderate improvement in operating profit in the quarter. The improvement comes as a result of cost reductions. The drop in revenue of 6 % is less than for the year as a whole, which was 11 %. Circulation shows a fall to 70,092. The improvement in operating profit in the quarter was the second in a row.
To improve service to readers of Dagens Næringsliv in Trøndelag and Møre & Romsdal, a printing contract has been agreed with Adressa-Trykk AS and the contract should become operational during April 2003.
TradeWinds has a drop in turnover. This is a result of the movement of the USD. In invoiced USD there is growth and both in advertising and circulation TradeWinds has increased market share. However there is a small fall in circulation to 7,100 copies. Operating profit is at the same level as last year and a range of cost reductions has been carried out both editorially and in sales. Introduction of new and cost-driving IT systems is also being carried out.
Upstream also has a fall in turnover that is also entirely a result of the dollar exchange rate movements. In invoiced dollars there is growth of over 10 % on both advertising and subscriptions. Developments in Europe and Asia have been particularly good. Through a range of cost reductions, operating profit is significantly improved. The circulation was at 5,400.
For DN Nye Medier we are now beginning to see the revenue effects of the solid growth in the number of readers/users through the year. At the same time costs have been reduced and they will be reduced further in the coming quarters.
Nautisk Forlag continues to make progress despite costs in connection with the start-up of new major contracts from the start of 2003. Substantial growth in turnover and profit for Nautisk is expected in the coming quarters.
TDN Nyhetsbyrå has a fairly stable turnover and profits. This shows that TDN is winning market share in a contracting market.
Through cost reductions the operating profit in Europower has been improved and costs will be further reduced in the coming quarters.
Intrafish Media still has solid growth. Especially the global publications have grown and with many new readers in USA/Canada. With the purchase of the Seattle-based The Wave the foundation for further growth should be good. For the newspaper Fiskaren the advertising market in Norway has shown a fall in the fourth quarter whilst the number of subscribers has grown to a level of nearly 10,000. From January 2003 onwards Intrafish is also coming out as a monthly journal in addition to the internet edition. Through further growth in turnover and cost reductions, operating profit improvements are expected in the coming quarters as well.
Conclusion:
The cost reductions will be continued and reinforced in some areas during the coming quarters. Through higher productivity and more targeted work it should be possible to combine this with improvements in terms of publications. There is continued uncertainty around the general economic picture even although the drop in advertising seems to be flattening out. Development in the USD will also impact negatively compared to last year. In sum however the Group expects that the moderate improvement quarter on quarter will continue.
17 March 2003
The Board of AS Norges Handels og Sjøfarts Tidende