Consolidated Interim Report for the Second Quarter and First Half-Year of 2018 01.08

While the first quarter passed in celebration of the 100th anniversary of Estonia and Lithuania, one of the key topics in the second quarter was the reorganisation of the joint venture Ajakirjade Kirjastus in Estonia. On 1 June, one part of Estonia's largest magazine publisher was merged with the Group's subsidiary Ekspress Meedia and the other part was merged with the joint venture SL Õhtuleht which bears the name Õhtuleht Kirjastus after the merger.

The key objective of the change was to find a better online output for the content of the printed publications of Ajakirjade Kirjastus and to foster the publications' cooperation with the existing strong web platforms. In 2018, it is not reasonable to start setting up a large new web-centre, but to offer high-quality content to the readers in cooperation with the existing platforms, i.e.  Delfi and Õhtuleht. Due to a thorough planning process, the transfers and changes were completed without any major incidents. The accompanying one-off expenses related to these changes amounted to ca EUR 200 thousand. We are able to state today that the content created by the companies of the former Ajakirjade Kirjastus has received greater visibility and readability due to large web portals.  

After very large-scale events in Lithuania in the first quarter such as the conference "The Idea for Lithuania" and "The Day of Best Classes" targeted at school children, slightly more modest but not less exciting projects were implemented in all countries in the second quarter. Ekspress Meedia organised an exclusive rally day with Ott Tänak on Tallinn Song Festival Ground, there was a concert given by Stig Rästa who performed the hits of Paul McCartney and the Beatles. Ajakirjade Kirjastus organised another Estonian Entertainment Awards event. As a media partner, Delfi Latvia contributed to several local conferences and festivals. The debate festival called Lampa is worth mentioning separately where one of the key speakers was President Toomas Hendrik Ilves. In collaboration with the Business Management Institute (BMI), Delfi Lithuania launched a new educational programme "Innovation and Digital Transformation" where one of the lecturers will also be the head of Delfi Lithuania. The joint project of Delfi Lithuania and Google DNI to fight fake news is successfully promoted at an international level. Delfi Lithuania was the main communication partner at the largest innovation conference in the Baltic States - Login.

The arrangement of events and activities under our different brands is becoming an increasingly important activity throughout the entire group. This will lead to the addition of a new revenue type and create an opportunity to grow advertising revenues which differ from the traditional approach.

Besides all of the above, we will continue producing strong journalistic content, and create the best and most reliable content for our readers. This is evidenced by the record number of journalism prizes awarded to our journalists by the Estonian Newspaper Association in the first quarter. We also received several awards for our journalistic activities in Latvia. We are trying to involve more young people in our activities. Eesti Ekspress has a summer youth campaign for the first time, the main objective of which is to encourage young people to make video and picture content, and introduce the Eesti Ekspress brand to them.  

We continue to invest in people and software solutions to enable new products to enter the market and to further develop, enhance and upgrade our digital platforms and online products. We are looking for synergies between printed products and online output. We are launching new verticals and shut down or reorganise the current ones.  

We are also expanding the direction of the outdoor advertising. In addition to the company acquired in Tartu in January, we are also expanding our network organically in Estonia and Latvia. The media buyer is beginning to understand the advantages of digital outdoor advertising; therefore the growth in this market as a whole is picking up.

The acquisition of a majority holding in Adnet, a provider of an advertising network and target group-based advertising sales solutions last November has together with Delfi companies significantly increased the Group’s online revenue and its share in total revenue. The share of the Group's digital revenue has increased to 37% of total revenue by the end of June. Delfi Lithuania has demonstrated especially strong growth. In Latvia, due to the local banking crisis and a change in the pricing policy of a major media monopoly, the advertising market is still stagnant. However, there is some pick-up in activities over the last month and an innovative approach to advertising sales has been successful.

The most complicated situation is at the Group's printing house that is under strong price pressures due to falling circulations. Our strength remains a very good service and quality of work which has made it possible to expand our service to the rest of Europe, but which will take longer than expected to grow. Paper shortages and a price increase have also had a negative impact. The decline in circulation and higher labour costs are also significantly affecting the results of our home delivery company.

The Group's revenue for the first half-year increased by 9% and totalled EUR 34 million. However, EBITDA decreased and amounted to EUR 2.3 million which is one-third less than in the same period last year. The main reason for the decrease in EBITDA is the lower-than-expected result of printing services, the difficult situation of the home delivery company and one-off reorganisation costs.

We are expecting the printing services segment to pick up in the second half of the year. The growth of media companies is forecasted to be modest and the reorganisation of the former Ajakirjade Kirjastus is still underway leading to stronger products that also have a future potential in the digital world.  

In the consolidated financial reports 50% joint ventures are recognised under the equity method, in compliance with International Financial Reporting Standards (IFRS). In its monthly reports, the management monitors the Group’s performance on the basis of proportional consolidation of joint ventures and the syndicated loan contract also determines the calculation of some loan covenants by proportional consolidation. For the purpose of clarity, the management report shows two sets of indicators: one where joint ventures are consolidated line-by-line 50% and the other where joint ventures are recognised under the equity method and their net result is presented as financial income in one line.

 

FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50% line-by-line

Performance indicators – joint ventures consolidated 50% (EUR thousand)

Q2 2018

Q2 2017

Change %

Q2 2016

Q2 2015

Q2 2014

For the period

 

 

 

 

 

 

Sales

17 659

16 382

8%

16 545

15 998

16 007

EBITDA

1 676

2 184

-23%

2 332

1 488

2 935

EBITDA margin (%)

9.5%

13.3%

 

14.1%

9.3%

18.3%

Operating profit

854

1 403

-39%

1 546

745

2 180

Operating margin (%)

4.8%

8.6%

 

9.3%

4.7%

13.6%

Interest expenses

(102)

(106)

3%

(134)

(146)

(181)

Net profit/(loss) for the period

893

1 221

-27%

1 324

481

1 858

Net margin (%)

5.1%

7.5%

 

8.0%

3.0%

11.6%

Return on assets ROA (%)

1.1%

1.6%

 

1.7%

0.6%

2.4%

Return on equity ROE (%)

1.7%

2.4%

 

2.7%

1.0%

4.2%

Earnings per share (EPS)

0.03

0.04

 

0.05

0.02

0.06

 

Performance indicators – joint ventures consolidated 50% (EUR thousand)

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2016

1st Half year 2015

1st Half year 2014

For the period

 

 

 

 

 

 

Sales

34 010

31 079

9%

30 947

30 179

30 773

EBITDA

2 344

3 427

-32%

3 574

3 005

4 389

EBITDA margin (%)

6.9%

11.0%

 

11.5%

10.0%

14.3%

Operating profit

695

1 891

-63%

2 022

1 507

2 871

Operating margin (%)

2.0%

6.1%

 

6.5%

5.0%

9.3%

Interest expenses

(205)

(222)

7%

(269)

(320)

(357)

Net profit/(loss) for the period

653

1 631

-60%

1 636

1 037

2 361

Net margin (%)

1.9%

5.2%

 

5.3%

3.4%

7.7%

Return on assets ROA (%)

0.8%

2.1%

 

2.1%

1.3%

3.1%

Return on equity ROE (%)

1.2%

3.2%

 

3.4%

2.2%

5.5%

Earnings per share (EPS)

0.02

0.05

 

0.06

0.03

0.08

 

Balance sheet – joint ventures consolidated 50% (EUR thousand)

30.06.2018

31.12.2017

Change %

As of the end of the period

 

 

 

Current assets

16 703

16 725

0%

Non-current assets

62 946

62 597

1%

Total assets

79 649

79 322

0%

      incl. cash and bank

1 391

2 818

-51%

      incl. goodwill

39 685

39 920

-1%

Current liabilities

13 325

11 081

20%

Non-current liabilities

15 262

15 747

-3%

Total liabilities

28 587

26 828

7%

      incl. borrowings

15 366

15 791

-3%

Equity

51 062

52 494

-3%

 

Financial ratios (%) - joint ventures consolidated 50%

30.06.2018

31.12.2017

Equity ratio (%)

64%

66%

Debt to equity ratio (%)

30%

30%

Debt to capital ratio (%)

21%

20%

Total debt/EBITDA ratio

2.73

2.35

Liquidity ratio

1.25

1.51

 

FINANCIAL INDICATORS AND RATIOS – joint ventures recognised under the equity method

Performance indicators – joint ventures under equity method (EUR thousand)

Q2 2018

Q2 2017

Change %

Q2 2016

Q2 2015

Q2 2014

For the period

 

 

 

 

 

 

Sales

15 304

13 923

10%

14 120

13 765

13 763

EBITDA

1 626

1 944

-16%

1 962

1 113

2 664

EBITDA margin (%)

10.6%

14.0%

 

13.9%

8.1%

19.4%

Operating profit

897

1 253

-28%

1 249

429

1 936

Operating margin (%)

5.9%

9.0%

 

8.8%

3.1%

14.1%

Interest expenses

(99)

(99)

0%

(121)

(130)

(181)

Profit /(loss) of joint ventures under equity method

152

141

8%

224

225

190

Net profit/(loss) for the period

893

1 221

-27%

1 324

481

1 858

Net margin (%)

5.8%

8.8%

 

9.4%

3.5%

13.5%

Return on assets ROA (%)

1.2%

1.6%

 

1.8%

0.6%

2.5%

Return on equity ROE (%)

1.7%

2.4%

 

2.7%

1.0%

4.2%

Earnings per share (EPS)

0.03

0.04

 

0.05

0.02

0.06

 

Performance indicators – joint ventures under equity method (EUR thousand)

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2016

1st Half year 2015

1st Half year 2014

For the period

 

 

 

 

 

 

Sales

29 321

26 332

11%

26 375

25 858

26 498

EBITDA

2 248

3 018

-26%

2 987

2 351

3 993

EBITDA margin (%)

7.7%

11.5%

 

11.3%

9.1%

15.1%

Operating profit

790

1 661

-52%

1 573

972

2 529

Operating margin (%)

2.7%

6.3%

 

6.0%

3.8%

9.5%

Interest expenses

(196)

(208)

6%

(241)

(285)

(357)

Profit /(loss) of joint ventures under equity method

91

210

-57%

356

419

288

Net profit/(loss) for the period

653

1 631

-60%

1 636

1 037

2 361

Net margin (%)

2.2%

6.2%

 

6.2%

4.0%

8.9%

Return on assets ROA (%)

0.9%

2.2%

 

2.2%

1.4%

3.2%

Return on equity ROE (%)

1.2%

3.2%

 

3.4%

2.2%

5.5%

Earnings per share (EPS)

0.02

0.05

 

0.06

0.03

0.08

 

Balance sheet - joint ventures under equity method (EUR thousand)

30.06.2018

31.12.2017

Change %

As of the end of the period

 

 

 

Current assets

14 975

13 827

8%

Non-current assets

62 488

62 130

1%

Total assets

77 464

75 957

2%

      incl. cash and bank

595

1 073

-45%

      incl. goodwill

37 969

37 969

0%

Current liabilities

11 347

8 372

36%

Non-current liabilities

15 054

15 091

0%

Total liabilities

26 401

23 463

13%

      incl. borrowings

15 128

15 257

-1%

Equity

51 062

52 494

-3%

 

Financial ratios (%) – joint ventures consolidated under equity method

30.06.2018

31.12.2017

Equity ratio (%)

66%

69%

Debt to equity ratio (%)

30%

29%

Debt to capital ratio (%)

22%

21%

Total debt/EBITDA ratio

2.75

2.44

Liquidity ratio

1.32

1.65

 

Formulas used to calculate the financial ratios

EBITDA

Earnings before interest, tax, depreciation and amortization. EBITDA does not include any impairment losses recognized during the period or result from restructuring.

EBITDA margin (%)

 EBITDA/sales x 100

Operating margin (%)

 Operating profit/sales x100

Net margin (%)

 Net margin in financial statements/sales x100

Earnings per share

 Net profit / average number of shares

Equity ratio (%)

Equity/ (liabilities + equity) x100

Debt to equity ratio (%)

Interest bearing liabilities /equity x 100

Debt to capital ratio (%)

Interest bearing liabilities – cash and cash equivalents (net debt) /(net debt +equity) x 100

Total debt/EBITDA ratio

Interest bearing borrowings /EBITDA

Debt service coverage ratio

EBITDA/loan and interest payments for the period

Liquidity ratio

Current assets / current liabilities

Return on assets ROA (%)

Net profit /average assets x 100

Return on equity ROE (%)

Net profit /average equity x 100

 

Cyclicality

All operating areas of the Group are characterised by cyclicality and fluctuation, related to the changes in the overall economic conditions and consumer confidence. The Group’s revenue can be adversely affected by an economic slowdown or recession in home and export markets. It can appear in lower advertising costs in retail, preference of other advertising channels like preference of internet rather than print media and changes in consumption habits of retail consumers e.g. following current news in news portals versus reading printed newspapers, preference of the younger generation to use mobile devices and other communication channels, etc.

 

Seasonality

The revenue from the Group’s advertising sales as well as in the printing services segment is impacted by major seasonal fluctuations. The level of both types of revenue is the highest in the 2nd and 4th quarter of each year and the lowest in the 3rd quarter. Revenue is higher in the 4th quarter because of higher consumer spending during the Christmas season, accompanied by the increase in advertising expenditure. Advertising expenditure is usually the lowest during the summer months, as well as during the first months of the year following Christmas and New Year’s celebrations. Book sales are the strongest in the last quarter of the year. Subscriptions and retail sales of periodicals do not fluctuate as much as advertising revenue. However the summer period is always more quiet and at the beginning of the school year in September there is an increase in subscriptions and retail sale which usually continues until next summer holiday period.

 

SEGMENT OVERVIEW

The Group’s activities are divided into two large segments - media segment and printing services segment.

The segments’ EBITDA does not include intragroup management fees, impairment of goodwill and trademarks. Volume-based and other fees payable to advertising agencies have not been deducted from the advertising sales of segments, because the management monitors gross advertising sales. Discounts and rebates are reduced from the Group’s sales and are included in the combined line of eliminations.

Key financial data of the segments Q2 2014–2018

 (EUR thousand)

Sales

Sales

 

Q2 2018

Q2 2017

Change %

Q2 2016

Q2 2015

Q2 2014

media segment (under equity method)

9 889

8 621

15%

8 511

7 984

7 492

      incl. revenue from all digital and online channels

6 492

5 117

27%

4 740

4 116

3 730

printing services segment

6 355

6 199

3%

6 663

6 386

7 210

entertainment segment

-

-

-

-

392

-

corporate functions

697

592

18%

593

488

422

intersegment eliminations

(1 637)

(1 490)

 

(1 648)

(1 485)

(1 361)

TOTAL GROUP under equity method

15 304

13 923

10%

14 120

13 765

13 763

media segment (by proportional consolidation)

12 527

11 410

10%

11 232

10 506

9 950

      incl. revenue from all digital and online channels

6 870

5 422

27%

4 903

4 258

3 848

printing services segment

6 355

6 199

3%

6 663

6 386

7 210

entertainment segment

-

-

-

-

392

-

corporate functions

697

592

18%

593

488

422

intersegment eliminations

(1 920)

(1 819)

 

(1 944)

(1 774)

(1 575)

TOTAL GROUP by proportional consolidation

17 659

16 382

8%

16 545

15 998

16 007

 


(EUR thousand)

EBITDA

EBITDA

 

Q2 2018

Q2 2017

Change %

Q2 2016

Q2 2015

Q2 2014

media segment (under equity method)

1 151

1 189

-3%

1 059

1 256

1 261

media segment (by proportional consolidation)

1 202

1 430

-16%

1 430

1 631

1 532

printing services segment

783

1 024

-24%

1 148

1 271

1 537

entertainment segment

-

-

-

-

(1 129)

-

corporate functions

(309)

(270)

-15%

(246)

(285)

(134)

TOTAL GROUP under equity method

1 626

1 944

-16%

1 962

1 113

2 664

TOTAL GROUP by proportional consolidation

1 676

2 184

-23%

2 332

1 488

2 935

 

EBITDA margin

Q2 2018

Q2 2017

Q2 2016

Q2 2015

Q2 2014

media segment (under equity method)

12%

14%

12%

16%

17%

media segment (by proportional consolidation)

10%

13%

13%

16%

15%

printing services segment

12%

17%

17%

20%

21%

TOTAL GROUP under equity method

11%

14%

14%

8%

19%

TOTAL GROUP by proportional consolidation

9%

13%

14%

9%

18%

 

Key financial data of the segments in the first-half year 2014–2018

 (EUR thousand)

Sales

Sales

 

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2016

1st Half year 2015

1st Half year 2014

media segment (under equity method)

18 419

16 049

15%

15 282

14 565

13 906

      incl. revenue from all digital and online channels

11 913

9 317

28%

8 298

7 466

6 517

printing services segment

12 576

11 966

5%

13 004

12 704

14 272

entertainment segment

-

-

-

-

453

-

corporate functions

1 388

1 167

19%

1 132

960

844

intersegment eliminations

(3 062)

(2 849)

 

(3 043)

(2 823)

(2 524)

TOTAL GROUP under equity method

29 321

26 332

11%

26 375

25 858

26 498

media segment (by proportional consolidation)

23 688

21 436

11%

20 428

19 468

18 587

      incl. revenue from all digital and online channels

12 597

9 875

28%

8 602

7 716

6 735

printing services segment

12 576

11 966

5%

13 004

12 704

14 272

entertainment segment

-

-

-

-

453

-

corporate functions

1 388

1 167

19%

1 132

960

844

intersegment eliminations

(3 643)

(3 489)

 

(3 618)

(3 406)

(2 930)

TOTAL GROUP by proportional consolidation

34 010

31 079

9%

30 947

30 179

30 773

 


(EUR thousand)

EBITDA

EBITDA

 

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2016

1st Half year 2015

1st Half year 2014

media segment (under equity method)

1 397

1 543

-9%

1 094

1 535

1 600

media segment (by proportional consolidation)

1 492

1 951

-24%

1 681

2 189

1 995

printing services segment

1 484

1 922

-23%

2 330

2 432

2 995

entertainment segment

-

-

-

(1)

(1 105)

-

corporate functions

(633)

(446)

-42%

(436)

(511)

(601)

TOTAL GROUP under equity method

2 248

3 018

-26%

2 987

2 351

3 993

TOTAL GROUP by proportional consolidation

2 344

3 427

-32%

3 574

3 005

4 389

 

EBITDA margin

1st Half year 2018

1st Half year 2017

1st Half year 2016

1st Half year 2015

1st Half year 2014

media segment (under equity method)

8%

10%

7%

11%

12%

media segment (by proportional consolidation)

6%

9%

8%

11%

11%

printing services segment

12%

16%

18%

19%

21%

TOTAL GROUP under equity method

8%

11%

11%

9%

15%

TOTAL GROUP by proportional consolidation

7%

11%

12%

10%

14%

 

MEDIA SEGMENT

The media segment includes the Group's activities in Estonia, Latvia and Lithuania. It comprises the operations of online portal Delfi, several different news portal providing online advertising network and programmatic sales, outdoor digital screen advertising in Estonia and Latvia, publishing of the Estonian weekly newspapers Maaleht, Eesti Ekspress and LP, the daily newspaper Päevaleht, tabloid Õhtuleht, freesheet Linnaleht, publishing of books and magazines in Estonia, publishing of magazines in Lithuania until December 2017 and providing home delivery services.

We acquired the Latvian digital screen company ACM LV in the 3rd quarter of 2017 and a 100% ownership in Adnet Media in the 4th quarter of 2017. On 1 June 2018, the joint venture Ajakirjade Kirjastus was organised. The publishing of primarily monthly magazines was moved to Ekspress Meedia and that of the weekly magazines to Õhtuleht Kirjastus (former name SL Õhtuleht). From the same date, Ajakirjade Kirjastus and SL Õhtuleht are considered as merged and it now bears the name of Õhtuleht Kirjastus. The figures of Ajakirjade Kirjastus for June include the revenue and EBITDA earned until the end of May. The revenue and expenses of the magazines moved to Ekspress Meedia are 100% included in the figures of AS Ekspress Meedia. The figures of magazines moved to Õhtuleht Kirjastus for June are included in the income statement of Õhtuleht Kirjastus.

 News portals owned by the Group

Owner

Portal

Owner

Portal

Ekspress Meedia

www.delfi.ee

Ekspress Meedia

www.ekspress.ee

 

rus.delfi.ee

 

www.maaleht.ee

Delfi Latvia

www.delfi.lv

 

www.epl.ee

 

rus.delfi.lv

 

 

Delfi Lithuania

www.delfi.lt

Õhtuleht Kirjastus

www.ohtuleht.ee

 

ru.delfi.lt

 

www.vecherka.ee

 


(EUR thousand)

Sales

EBITDA

 

Q2 2018

Q2 2017

Change %

Q2 2018

Q2 2017

Change %

Ekspress Meedia

5 476

5 065

8%

416

424

-2%

      incl. online advertising revenue

1 946

1 903

2%

 

 

 

Delfi Latvia

1 028

1 007

2%

146

131

11%

Delfi Lithuania

2 497

2 461

1%

590

645

-8%

      incl. online advertising revenue

2 469

1 993

24%

 

 

 

Adnet

1 003

-

-

57

-

-

Hea Lugu

145

90

60%

(9)

(10)

5%

ACM LV

45

-

-

(54)

-

-

Other companies

-

-

-

5

(1)

657%

Intersegment eliminations

(304)

(2)

 

0

0

 

TOTAL subsidiaries

9 889

8 621

15%

1 151

1 189

-3%

Õhtuleht Kirjastus*

1 413

1 181

20%

103

161

-36%

Ajakirjade Kirjastus (until May 2018)*

809

1 161

-30%

15

53

-72%

Express Post*

516

601

-14%

(105)

(0)

-29445%

Linna Ekraanid*

144

101

42%

38

27

43%

Intersegment eliminations

(244)

(256)

 

0

0

 

TOTAL subsidiaries

2 638

2 789

-5%

51

241

-79%

TOTAL segment by proportional consolidation

12 527

11 410

10%

1 202

1 430

-16%

 

(EUR thousand)

Sales

EBITDA

 

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2018

1st Half year 2017

Change %

Ekspress Meedia

10 330

9 560

8%

549

645

-15%

      incl. online advertising revenue

3 553

3 439

3%

 

 

 

Delfi Latvia

1 868

1 862

0%

133

218

-39%

Delfi Lithuania

4 545

4 444

2%

708

696

2%

      incl. online advertising revenue

4 495

3 611

24%

 

 

 

Adnet

1 927

-

-

105

-

-

Hea Lugu

304

186

63%

(10)

(15)

29%

ACM LV

88

-

-

(93)

-

-

Other entities

-

-

-

5

(1)

508%

Intersegment eliminations

(644)

(3)

 

0

0

 

TOTAL subsidiaries

18 419

16 049

15%

1 397

1 543

-9%

Õhtuleht Kirjastus*

2 585

2 278

13%

172

258

-33%

Ajakirjade Kirjastus (until May 2018)*

1 862

2 292

-19%

59

137

-57%

Express Post*

1 080

1 187

-9%

(180)

(25)

-608%

Linna Ekraanid*

240

174

38%

45

39

15%

Intersegment eliminations

(497)

(544)

 

0

0

 

TOTAL subsidiaries

5 269

5 387

-2%

96

408

-77%

TOTAL segment by proportional consolidation

23 688

21 436

11%

1 492

1 951

-24%

* Proportional share of joint ventures

 

ONLINE MEEDIA

Estonian online readership

In the quarter ended, Ekspress Meedia launched new online outputs for all magazines: www.eestinaine.ee; www.tervispluss.ee; www.omamaitse.ee; www.kroonika.ee; www.annestiil.ee; www.perejakodu.ee. Delfi IOS app was updated, the interior design channel www.dekor.ee was launched for the Russian population. Popular coverages worth mentioning include the WRC series and Anett Kontaveit games. Õhtuleht Kirjastus launched new websites: www.linnaleht.ee and www.ohtulehtkirjastus.ee.

Latvian online readership

Delfi has maintained its stable position as the news portal with the largest user base in Latvia. In the quarter ended, several major projects were implemented, e.g. a special China-themed page, coverage of the song and dance festival. Hockey and soccer themed special pages were launched and a new video studio was opened. Since June, an updated methodology of Gemius audience survey is used in Latvia.

Lithuanian online readership

Delfi.lt remains the largest online portal in Lithuania and has a significant impact on the society. In the first quarter of 2018, DELFI's innovative solution “Hot spots” and an interactive map of the places around the world with the most news coverage were launched, and Delfi TV https://www.delfi.lt/video/ was revamped. From April, an updated methodology of Gemius audience survey was used in Lithuania. As a result, since April we have used the average daily users as the basis for comparing the number of readers in Lithuania.

PRINT MEDIA

Estonian newspaper circulation

Õhtuleht continues to be the largest daily newspaper by circulation. Traditionally, Maaleht was the largest newspaper in January and last December.

PRINTING SERVICES SEGMENT

All printing services of the Group are provided by AS Printall which is one of the largest printing companies in Estonia. We are able to print high-quality magazines, newspapers, advertising materials, product and service catalogues, paperback books and other publications in our printing plant.

 

(EUR thousand)

Sales

EBITDA

 

Q2 2018

Q2 2017

Change %

Q2 2018

Q2 2017

Change %

Printall

6 355

6 199

3%

783

1 024

-24%

 

(EUR thousand)

Sales

EBITDA

 

1st Half year 2018

1st Half year 2017

Change %

1st Half year 2018

1st Half year 2017

Change %

Printall

12 576

11 966

5%

1 484

1 922

-23%

 

For several years already, the printing services segment has been under pressure due to continued digitalisation of regular journalism and the increasing popularity of Internet as compared to printed products. The price pressure is very strong both in Scandinavia and Estonia, because other Baltic States also have very competitive services. A sheet-fed printing press purchased two years ago has helped us expand the product range also outside the regular media sector. We are also engaged in active sales activities outside Nordic countries.

Consolidated balance sheet (unaudited)

(EUR thousand)

30.06.2018

31.12.2017

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

595

1 073

Trade and other receivables

10 587

9 917

Corporate income tax prepayment

148

4

Inventories

3 646

2 832

Total current assets

14 975

13 827

Non-current assets

 

 

Trade and other receivables

1 241

1 750

Deferred tax asset

47

47

Investments in joint ventures

2 504

2 372

Investments in associates

354

354

Property, plant and equipment

12 079

12 189

Intangible assets

46 264

45 419

Total non-current assets

62 488

62 130

TOTAL ASSETS

77 464

75 957

LIABILITIES

 

 

Current liabilities

 

 

Borrowings

74

166

Trade and other payables

11 177

8 095

Corporate income tax payable

96

111

Total current liabilities

11 347

8 372

Non-current liabilities

 

 

Long-term borrowings

15 054

15 091

Total non-current liabilities

15 054

15 091

TOTAL LIABILITIES

26 401

23 463

EQUITY

 

 

Minority shareholding

67

68

Capital and reserves attributable to equity holders of parent company:

 

 

Share capital

17 878

17 878

Share premium

14 277

14 277

Treasury shares

(22)

(22)

Reserves

1 688

1 531

Retained earnings

17 174

18 762

Total capital and reserves attributable to equity holders of parent company

50 996

52 426

TOTAL EQUITY

51 062

52 494

TOTAL LIABILITIES AND EQUITY

77 464

75 957

 

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)

Q2 2018

Q2 2017

1st Half year 2018

1st Half year 2017

Sales

15 304

13 923

29 321

26 332

Cost of sales

(12 027)

(10 725)

(23 591)

(20 800)

Gross profit

3 278

3 198

5 731

5 532

Other income

121

270

160

448

Marketing expenses

(718)

(798)

(1 485)

(1 514)

Administrative expenses

(1 766)

(1 400)

(3 582)

(2 762)

Other expenses

(18)

(18)

(34)

(42)

Operating profit

897

1 253

790

1 661

Interest income

44

55

87

114

Interest expenses

(99)

(99)

(196)

(208)

Other finance income and costs

(15)

(18)

(34)

(34)

Net finance cost

(70)

(63)

(142)

(127)

Profit (loss) on shares of joint ventures

152

141

91

210

Profit (loss) on shares of associates

0

(21)

0

(23)

Profit before income tax

979

1 310

740

1 721

Income tax expense

(86)

(89)

(86)

(90)

Net profit for the reporting period

893

1 221

653

1 631

Net profit for the reporting period attributable to

 

 

 

 

Equity holders of the parent company

894

1 221

654

1 631

Minority shareholders

(1)

0

(1)

0

Other comprehensive income

0

0

0

0

Total comprehensive income

893

1 221

653

1 631

Comprehensive income for the reporting period attributable to

 

 

 

 

Equity holders of the parent company

894

1 221

654

1 631

Minority shareholders

(1)

0

(1)

0

Basic and diluted earnings per share

0.03

0.04

0.02

0.05

 

Consolidated cash flow statement (unaudited)

(EUR thousand)

1st Half year 2018

1st Half year 2017

Cash flows from operating activities

 

 

Operating profit for the reporting year

790

1 661

Adjustments for:

 

 

Depreciation, amortisation and impairment

1 458

1 357

(Gain)/loss on sale and write-down of property, plant and equipment

(7)

(3)

Cash flows from operating activities:

 

 

Trade and other receivables

(274)

80

Inventories

(814)

78

Trade and other payables

960

(487)

Cash generated from operations

2 113

2 686

Income tax paid

(245)

(231)

Interest paid

(196)

(208)

Net cash generated from operating activities

1 672

2 247

Cash flows from investing activities

 

 

Interest received

67

102

Purchase of other investments

(1 000)

(35)

Purchase of property, plant and equipment

(1 212)

(814)

Proceeds from sale of property, plant and equipment

25

13

Loans granted

(476)

(2 025)

Loan repayments received

574

1 028

Net cash used in investing activities

(2 022)

(1 732)

Cash flows from financing activities

 

 

Dividends received

0

56

Finance lease payments made

(37)

(35)

Change in overdraft

(92)

0

Repayments of bank loans

0

(552)

Net cash used in financing activities

(129)

(531)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(479)

(15)

Cash and cash equivalents at the beginning of the year

1 073

2 856

Cash and cash equivalents at the end of the year

595

2 842


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