Lagardere keeps goal as H2 seen stronger than H1
PARIS (Reuters) - Media-to-aerospace group Lagardere (LAGA.PA) posted a lower first-half operating profit but kept its full-year target as it expected the second half to be much better than the previous half.
"The second half of the year should benefit from a significant improvement in profitability after a first half performance that cannot be extrapolated to the full year," the company said in a statement on Thursday, pointing out that the first six months of the year are traditionally weaker.
Recurring operating profit from media activities came in at 112 million euros ($140.31 million), down from 168 million from the same period a year ago, on sales that were roughly stable at 3.389 billion euros.
In the first quarter, Lagardere saw a 12.5 percent drop in its sales because of problems with its fledgling sports unit and weaker ad demand. In June it warned advertising sales would drop 3-5 percent at its magazine and radio division compared with a previous forecast for stable sales.
But so far Lagardere has said it could cut costs to make up for the shortfall, which would allow it to keep its target for stable recurring earnings before interest and tax this year.
The company's Lagardere Services, which includes retail outlets in airports and train stations and distribution, saw sales in the first half of this year partly benefit from "dynamic global air traffic levels".
Sales reached 1.821 billion euros, up 1 percent or 2.4 percent like-for-like. But operating profit slipped to 37 million from 41 million due to costs linked to the unit's development in Asia and integration costs from new activities in Europe.
The book publishing division also saw lower profits -- down at 57 million from 71 million -- hurt by the advent of e-books, which tend to have lower prices, in the U.S. and the UK markets. Lagardere called the outlook for the second half positive, citing the launch of new books.
Lagardere shares closed 2.6 percent lower at 21.58 euros, taking gains to about 8.6 percent this year against a 30 percent drop last year due to repeated profit warnings, problems at the fledgling sports unit, and the failure of a public listing of a stake in pay TV operator Canal+.
(Reporting by Caroline Jacobs and Lila Abboud, Editing by Christian Plumb, Dominique vidalon)
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