Ekspress Grupp increased its revenue, but incurred a loss in the first quarter

AS Ekspress Grupp increased its revenue in the first quarter of the current year due to the growth in digital services, but incurred a loss as a result of seasonality, higher interest costs and the economic crisis that started at the end of the quarter, as the company’s interim report for the first quarter of 2020 shows.

The sales revenue of AS Ekspress Grupp in the first quarter of 2020 amounted to EUR 15.7 million which is EUR 0.4 million or 2 per cent higher than in the same period of 2019. The earnings before interest, tax, depreciation and amortisation (EBITDA) totalled EUR 0.67 million, increasing by EUR 0.06 million or 9 per cent year-over-year. The first quarter’s net loss totalled EUR 0.74 million, which is EUR 0.13 million or 21 per cent higher than in the same period of 2019.

According to Mari-Liis Rüütsalu, the Chairman of Ekspress Grupp, the start of the quarter was successful for Ekspress Grupp; however, the economic crisis related to the coronavirus pandemic had a negative effect. “The major part of the first quarter saw solid economic growth in the Baltic States, also clearly evidenced by strong advertising sales of media companies. We grew our digital revenue that already accounted for 65% of the Group’s sales revenue of the media segment. The loss incurred in the first quarter is normal for a media group due to seasonality, but its widening was primarily impacted by higher interest expenses as compared to the previous year as well as the state of emergency declared in mid-March that led to a decline in advertising revenue,” explained Rüütsalu.

In response to the crisis, Ekspress Grupp significantly cut its costs already in March. “Based on our estimate the economic crisis accompanying the coronavirus pandemic will also significantly impact the operations and revenues of Ekspress Grupp in the second and third quarters. The media companies, especially outdoor media companies and Latvia’s ticket sales platform, are particularly vulnerable to the effects related to the restrictions, “noted Rüütsalu.

In the first quarter of 2020, the number of digital subscriptions of Ekspress Grupp’s media outlets increased strongly in all three Baltic States, reaching 54 thousand subscribers. Digital subscriptions in Estonia and Latvia increased the most, by 11% and 61%, respectively.