Publicitas bankruptcy and newspaper crisis depress Tamedia's profits

At Switzerland's largest media group, the shift away from publishing to commercial digital services is progressing. In the first half of the year, for example, Tamedia was only able to keep sales at about the same level as the previous year at CHF 477.5 million (PY 477.8 million) thanks to these offerings and the acquisition of Neo Advertising. The revenue share of digital offerings increased to 39.3 percent from 37.1 percent in the previous year, Tamedia announced on Tuesday.

Profit, on the other hand, was markedly lower: Net profit decreased by 48 percent to 39.9 million Swiss francs. The decline is largely attributable to special factors. Among other things, the bankruptcy of the advertising broker Publicitas led to a value adjustment of receivables of 5 million Swiss francs. In addition, pension costs increased significantly to 52 million Swiss francs. However, even adjusted for these special factors, Tamedia posted a lower result of CHF 45.4 million compared to the previous year(PY CHF 54.5 million).

Slump in profits for media titles

This drop in profit is attributable to the media titles. The operating result (EBITDA) of the daily and weekly newspapers and magazines fell sharply by 42 percent to CHF 21.6 million. According to the press release, the operating result was lower in particular due to the bankruptcy of Publicitas, the closure costs of the print edition of Le Matin and the lower result of the newspaper printing centers.

However, Tamedia also generated declining profits with the commuter newspapers. Operating profit fell by 22 percent to CHF 14.7 million due to declining print advertising revenues.

Tamedia increased stake in Zattoo to over 50 percent

In contrast, Tamedia was able to increase profits in the segment with digital offerings. The Marketplaces and Investments segment increased its operating profit by 12 percent to CHF 53.2 million. In particular, the job platforms JobCloud developed well, Tamedia writes in this regard. With the half-year figures, Tamedia also announced that it had increased its stake in the Internet TV service Zattoo to over 50 percent (Werbewoche.ch reported). The partnership between Tamedia and Goldbach will result in new synergies for the marketing of Zattoo in Switzerland and Germany, according to the statement. Tamedia's majority takeover of Zattoo is still subject to approval by the Swiss Federal Competition Commission. (SDA)

¹ as of 31.12.2017

² Equity to total assets

³ Margin refers to operating income

⁴ The average number of employees does not include employees of associated companies / joint ventures.