OSLO, July 18 (Reuters) - Norwegian publishing company Schibsted ASA reported weaker-than-expected second-quarter earnings on Friday and said margins for its traditional media business would remain under pressure while some classified ad sites may also perform weaker.
Schibsted, which already converted a third of its revenues to digital from print with a rapid expansion into dozens of countries, said its online classified business could keep growing at a 15-20 percent pace over the mid to long term, but there are short-term challenges for both print and digital.
“Reduction of costs in order to maintain a healthy profit is one of the key objectives for the management teams of our media houses,” Chief Executive Rolv Erik Ryssdal said. “Nevertheless, we may see that margins in the media houses will remain under some pressure during this...transition phase from offline to online business models.”
Its online business, a cross between eBay and advertising portal Craigslist, sells everything from cars to manure in around 30 countries, with key operations in France, Spain and the Nordic countries.
It has also stepped up its expansion in emerging markets and considers Indonesia, Brazil and Chile among its top prospects.
However, its top Norwegian site could see weaker growth because of the country’s generally weaker economic outlook while growth at the top French site could suffer due to a revamped monetization strategy.
The company’s second-quarter earnings before interest, taxes, depreciation and amortisation rose to 574 million crowns ($92.43 million) from 562 million crowns a year ago, trailing expectations for 603 million crowns.
$1 = 6.2100 Norwegian kroner Reporting by Balazs Koranyi; Editing by Matt Driskill