British newspapers can’t catch a break when it comes to growing online earnings – just look at Trinity Mirror’s negative digital growth in 2009 so far. But Scandinavian publishers aren’t finding things quite as tough…
For the three months to September 30, Norway’s based Schibsted reported a 52 percent lift in operating profit to 303 million Norwegian krone (£32.4 million), helped by heavy cost cuts and year-on-year online operating revenue growth of 17 percent to NOK 926 million (£99.1 million).
Online profits rose 14 percent to NOK 199 (£21 million) — meaning that digital now accounts for 28 percent of total earnings. UK newspapers would kill to be back at this kind of 2008-level online growth.
The Aftenposten publisher’s operating revenue was up 10 percent to NOK 3.27 billion (£350 million) — a two percent underlying decline. But despite its online successes, the company is far from immune to the decline in newspapers’ earning power: advertising revenue overall fell seven percent year on year and the company made nine percent lower print revenue of NOK 2.18 billion (£233 million).
Like newspaper businesses such as DMGT in the UK, Schibsted is keen to grow and control a share of the online classifieds market and in Q3 increased its ownership stake in InfoJobs.net to 98.5 percent; its stake in Finn.no will rise to 80 percent in Q4
Also like UK pubs, the company has also been selling off “non-core” assets such as online archives business Retriever, while sales processes are underway for some property in Oslo and shareholding in mobile entertainment company Aspiro.
Schibsted’s real earnings boost comes from a “profitability programme” cost-cutting drive designed to save NOK 1 billion (£107 million) in 2009, which has cut 650 staff jobs to so far. But the job is only three quarters done with another NOK 300 million still to be saved, so Schibsted may still have some redundancy notices to hand out in Q4. In July Schibsted completed a NOK 1.3 billion (£140,000) rights issue, leaving its debt at 2.4 times EBITDA at the end of Q3.