At the Board meeting today, the Board of Directors of Schibsted ASA approved the interim financial statement as of September 30, 2003.
Please find enclosed the Interim Report for 3nd Quarter 2003.
Information on internet:
(Figures in parentheses refer to the corresponding period in 2002.)
Financial situation
Schibsted's operating revenues in the 3rd quarter of 2003 were NOK 2,031 million, an increase of NOK 168 million in comparison with the same period in 2002. The operating profit before goodwill and other revenues and expenses (EBITA) increased from NOK 81 million in the 3rd quarter of 2002 to NOK 117 million in 2003. This success can be attributed to good results for the Newspapers business area, where VG and Aftonbladet in particular are posting strong results at the same time as SvD is showing a significant improvement.
Income from associated companies for the 3rd quarter of 2003 was NOK 3 million. The improvement of NOK 56 million is due to improved results from the regional newspapers, the positive trend in 20 Minutes and good results from TV 2.
Net financial items for the 3rd quarter of 2003 were NOK - 9 million (NOK - 40 million). With effect from the 2nd quarter of 2003, all foreign exchange gains (losses) relating to liabilities used for hedging investments in foreign units are recognised directly in equity. Figures for previous periods have been restated. In the 3rd quarter of 2003 interest-bearing debt was reduced to NOK 1.4 billion (NOK 2.1 billion). Repayment of long-term debt, in combination with a reduced interest-rate level, has lowered net interest costs by NOK 40 million as at 30.9. Net interest bearing debt has been reduced by NOK 125 million since the start of the year, despite repurchase of own shares, payment of a dividend in May and a normal seasonal increase in working capital. Total liquidity reserves for the Group as of 30.9.2003 were approximately NOK 1.6 billion.
The Group's operating revenues as of the 3rd quarter of 2003 were NOK 6,229 million (NOK 5,817 million); approximately NOK 100 million of this increase is due to a weaker Norwegian krone compared with the Swedish krona. The operating profit (EBITA) shows an improvement from NOK 413 million to NOK 583 million in the same period. Profit before tax was NOK 516 million (NOK 173 million). Taxes in the 3rd quarter were NOK 155 million (NOK 80 million). As a result of differences between accounting results and tax base, the Group's tax expenses may deviate from the nominal tax rate in Norway (28%). These differences are primarily related to amortisation of goodwill, income from associated companies and losses in foreign subsidiaries, for which no deferred tax benefit is recognised in the balance sheet. As a result of improved profit, reduced losses in foreign subsidiaries and positive contributions from associated companies, the Group's tax rate was reduced to 30% for the period.
Earnings per share and diluted earnings per share were both NOK 5.08 (NOK 1.36)
So far this year the Group has invested NOK 201 million in fixed and intangible assets and NOK 29 million in shares.
In accordance with authorisation from the Annual General Meeting, Schibsted ASA has repurchased 1,490,518 shares, 405,000 of these in the 1st quarter of 2003. In connection with employees being given the opportunity to purchase shares at a discounted price, 47,482 shares were sold to the Schibsted Employees' Share Purchase Fund in the 3rd quarter of 2003 at a price of NOK 100 per share.
The Group's equity ratio was 40.6 % at the end of the 3rd quarter of 2003, compared with
34.1 % at the beginning of the year.
Future prospects
The newspaper division as a whole is expected to improve operating profit in 2003 substantially compared to 2002, due to strong performance of the family tabloids and substantial improvement in SvD's results. An improvement in Aftenposten's main markets is not expected.
At the end of the 3rd quarter Schibsted has an equity ratio above 40%. In the long term it is desirable for the equity ratio to be in the region of 35%. The dividend policy calls for gradually increased dividends reflecting growth in earnings. Both dividends and repurchase of shares must be viewed in connection with strategic alternatives. Dividends and repurchase of shares will be discussed further in connection with discussion of the dividend decision for the 2003 financial year.
During October the Group issued bonds in the Norwegian bond market for a total of NOK 900 million in order to compensate for the reduction in the borrowing limits on the current credit facility. At the end of October 2003 this credit facility was USD 180 million and is due for repayment in October 2004. This facility will be replaced by a new facility in the spring of 2004 and the management does not see any risk in relation to this refinancing.
Schibsted will continue to focus on improved profitability and cash flow within all its business areas with the aim of further improving the Group's financial flexibility and freedom of action. The group is well placed for pursuing further growth. Growth can occur both organically and as the result of acquisitions. Growth will primarily occur within the group's current geographic markets. The group's strong position within its business areas and its competitive advantages will be the basis for growth, and acquisitions need to complement and further strengthen these positions. The growth strategy, as well as specific projects will be evaluated on the basis of the group's financial targets.
As a result of the group's improved performance and completed operational measures the financial targets have been revised. The EBITA target is increased from 11% to 12%, and return on total assets is increased from 12% to 15%. The targets are to be achieved over a complete business cycle.
Oslo, 30 October 2003
The full report with tables can be downloaded from the following link:
Presentation of 3rd quarter 2003 can be downloaded from the following link: