IN&M profits fall 52% to €73m

Media group Independent News & Media (IN&M ) has reported a 52 per cent fall in operating profits to €73.2 million as advertising revenues come under pressure due to the economic downturn.

As a result, IN&M said it full-year operating profit before one-time items will be at the lower end of previous guidance of €180 million to €210 million.

IN&M also repeated that it believed an agreement could be reached with bondholders on a €200 million bond that was meant to be repaid in May and has been rolled over on an almost monthly basis since then.

“While there can be no certainty that discussions will be successfully concluded or that a restructuring solution will be made available on commercially-acceptable terms, the directors believe that an agreement can be reached that is acceptable,” the company said.

Late last night IN&M confirmed to the stock market that it has secured a third standstill agreement meaning that it now has until September 25th to agree a deal with bondholders. Later that month it also has to repay €50 million due on bank debt. In total INM has a €1.3 billion debt pile.

Shares in IN&M rose by 11.5 per cent to 32 cent in Dublin in early trading.

Revenues fell 22 per cent to €608.8 million (14.9 per cent in constant currency) for the six months to the end of June while operating profit before exceptional items were 52.4 per cent lower at €73.2 million.

The company reports a loss of 6.4 cent per share compared with earnings of 6 cent a share during the same period in 2008.

Interim adjusted earnings per share plunged 81 per cent to 1.4 cents as revenues slid 15 per cent.

The group, which is fighting a global advertising downturn, said it had decided not to pay an interim dividend this year.

"The group's current forecast presumes a continuation of poor advertising markets to year-end, with no material pick-up from the trend experienced in the first half," it said in a statement.

Advertising revenues were down 19.6 per cent with publishing ad revenues - including online - down 25.8 per cent. Outdoor ad revenues rose 1.3 per cent.

IN&M said it aimed to raise over €110 million from the sale of its outdoor advertising business in South Africa and Verivox, a price comparison website, before the end of the year.

It has already raised €37 million from the sale of other non-core businesses.

Additional reporting Bloomberg/Reuters