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UPDATE 1-European publisher Mecom's profit rises as cost cuts pay off
April 24, 2014 / 8:56 AM / 3 years ago

UPDATE 1-European publisher Mecom's profit rises as cost cuts pay off

* Says Q1 EBITDA rises by 5.2 mln euros

* Advertising revenue falls 27 pct

* Circulation revenue falls 6 pct

* Shares rise as much as 6.4 pct in early trade (Adds details, share movement, background)

April 24 (Reuters) - European newspaper publisher Mecom Group Plc said its first-quarter core profit rose as cost-cutting efforts in Denmark and the Netherlands, its largest markets, offset a fall in revenue.

Shares in the company rose as much as 6.4 percent in early trade, making the stock one of the top percentage gainers on the London Stock Exchange.

The company, which publishes regional newspapers such as De Gelderlander and De Stentor in the Netherlands, said group core earnings - or earnings before interest, tax, depreciation and amortisation (EBITDA) - rose by 5.2 million euros ($7.19 million) from a year earlier.

EBITDA in the Netherlands rose 5.5 million euros, while there was a slight decline in core earnings in Denmark.

Mecom had an adjusted EBITDA of 87.9 million euros for 2013.

The company, which owns more than 250 newspapers and magazines, and 200 websites, said total cost reduced by 17 percent. Costs fell 14 percent in the Netherlands and 20 percent in Denmark.

The publisher has been selling assets and cutting jobs and costs to ease the impact of sliding advertising rates across all its markets.

The sale of assets helped Mecom cut about 91 million euros of debt, leaving it owing 38 million euros at the end of 2013.

Mecom said on Thursday that it was still in talks to sell Limburg Media Groep - its newspaper business in the Netherlands.

Like other publishers, Mecom has been struggling to retain advertisers as readers flock to cheaper digital media.

Revenue in the quarter ended March 31 fell as advertising revenue continued to decline in the Netherlands and Denmark.

Group advertising revenue fell 27 percent, it said.

Dutch advertising revenue fell 20 percent in the first quarter, while advertising revenue in Denmark fell 38 percent.

Circulation revenue declined 6 percent.

The publisher expects full-year core earnings to be similar to underlying pro-forma 2013 EBITDA of 74 million euros.

The company said in March that it had made a firm start to 2014, but continued to expect advertising revenue declines in the year.

Shares in the company were trading up 3.1 percent at 133.25 pence at 0850 GMT. ($1 = 0.7231 Euros) (Reporting by Noor Zainab Hussain in Bangalore; Editing by Gopakumar Warrier)

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