February 8, 2008 / 8:11 AM / 10 years ago

Metro free newspaper group reports Q4 profit fall

STOCKHOLM, Feb 8 (Reuters) - Free newspaper group Metro International MTROsdba.ST on Friday posted a 61 percent fall in fourth-quarter operating profits and said results in the United States were hurt by the global credit crunch.

U.S. newspapers are suffering as retailers reduce print advertising in favour of the Internet, while the drop in home sales has crimped real estate ads.

Metro said group operating profit was $4.3 million in the quarter against $10.9 million in the corresponding period in 2006.

The largest free newspaper group in the world said U.S. results in the quarter were very disappointing.

"Good revenue growth in October was followed by a drop in sales versus 2006 in November and December as the U.S. credit crunch started to bite," The group said in a statement.

The group said it had made 27 people redundant across its three U.S. cities in January 2008 to minimise the impact of revenue declines.

"Further actions to improve the business in the U.S. may be taken," it said.

Operating results include a charge for a disputed advertising tax provision in Sweden of $10.2 million but also a net gain of $4.7 million from the sale of 60 percent of Metro Czech Republic in December.

"Metro International has not been immune from the volatility affecting the global newspaper industry, which has been reflected in the latest results of the company," Metro Chief Executive Per Jensen said in a statement.

Sales increased by 12 percent to $139.2 million against $124.1 million in the 2006 period, Metro said.

Metro -- published in over 100 cities in 21 countries across the world -- said Chile and Hong Kong maintained strong 2007 performance in the quarter with sales and operating profit growth, while profits were strong in France and Italy. (Reporting by Kim McLaughlin; Editing by David Cowell)

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