With ad revenue decreasing by 12 percent compared with the first quarter in 2011, pan-European publisher Mecom announced Thursday it likely won’t hit its profit expectations this year, MediaGuardian reported.
Mecom owns titles in the Netherlands, Denmark and Poland. According to the Guardian report, it cautioned a “modest reduction” in earnings before interest, tax, depreciation and amortisation compared with last year.
The profit warning comes on a double-digit slump at its flagship Dutch operation, which fell by 9 percent year-on-year in the first quarter of 2012, according to another report by the Guardian.
Financial Timesreported that its Dutch titles account for almost 70 percent of the company’s profits. The ad revenue recorded declines of 10 percent, 19 percent for Denmark and Poland respectively.
After the announcement, Mecom shares fell 4.2 percent to 147p in London. Analysts downgraded expectation of its earnings to €105m (US$139.1m) from €113.6m ($150.5m), MediaGuardian reported.
“The advertising environment… has deteriorated further and although the impact is being partly mitigated by cost reductions as we successfully implement our restructuring programme, overall revenues have decreased,” said Tom Toumazis, group chief executive at Mecom
Non-ad revenues displayed a flat performance. Toumazis attributed it to the strength of a 1.2 million subscriber base, Journalism.co.uk. reported.
According to the FT, the cost-cutting program will see jobs cut across the group, the possible introduction of a pay model for its top 10 newspapers and the closure of up to 65 titles.