Profit growth for Polaris Media: – Strong digital development

The Trondheim-based media group reports this in a stock exchange and press release on Wednesday morning.

Polaris Media reports an operating result before depreciation and amortization (EBITDA) of NOK 37 million in the first quarter of 2024. The result is NOK 17 million higher than in the corresponding period last year. The profit improvement is driven by significant cost reductions and income growth from digital subscriptions, the group reports. User revenues increased by four percent in the quarter, driven by a 28 percent growth in digital subscription revenues.

The digital growth compensated for the continued decline in paper-based revenues. The number of digital subscriptions was 393,000 at the end of the quarter, an increase of 18 per cent from the same period last year. Fully digital subscriptions now make up 64 per cent of the group’s total subscription mass of 611,000, the group reports.

– Joyful

– Our media houses have strong digital development. In 2023, digital subscription revenues increased by 17 per cent, and it is pleasing to note that growth increased to 28 per cent in the first quarter of the year. The growth in the number of digital subscriptions means that we also have growth in the total mass of subscriptions, despite the fact that fewer people subscribe to the paper newspaper, says CEO Per Axel Koch.

Several of the media houses in Polaris Media have recently received awards for their editorial work. In April, Göteborgs-Posten received an award from the international industry organization INMA for its podcast “Hennes namn var”, while Adresseavisen was awarded the Skup diploma for its article series “The Billionaire”. Adresseavisen has also recently won several awards for the podcast “Rått parti”. Fædrelandsvennen was awarded “Media House of the Year 2023” by the Media Companies National Association (MBL) at the beginning of May.

Adresseavisen received the Skup diploma for billionaire disclosure

– We are proud that our media houses are recognized with these prestigious awards. The awards are confirmation that our newsrooms deliver very well on their social mission. The good growth we have in subscription income would not have been possible without quality journalism that engages readers, says Koch.

In the advertising market, the situation is more demanding. Polaris Media’s advertising revenue ended 11 percent lower than in the first quarter last year. The decline is due to a failure in paper-based advertising revenue, which fell by 23 per cent. Digital advertising revenues developed better and grew by four percent.

– The advertising market is still demanding in both Norway and Sweden, and this seems likely to persist until the macroeconomic conditions improve, comments Per Axel Koch. R

Polaris Media’s operating costs in the first quarter ended up six percent lower than the same period last year. In 2023, the group implemented significant efficiency measures both in the media houses, the printing plants and the distribution business.

Savings

– The cost reduction in the first quarter is a result of the extensive efficiency measures we carried out during last year. These were necessary measures to compensate for the failure in the advertising market, lower paper-based revenues and the underlying cost pressure, explains Koch. The group expects the measures to provide a total gross saving of NOK 300 million in full-year effect from 2025, compared to the cost base in 2022.

The effect in 2024 will be approximately NOK 250 million, reports Polaris Media.

– The majority of the measures were carried out last year and are almost fully effective this year. Certain measures are being implemented now in 2024. This applies, among other things, to the consolidation of our two printing plants in central Norway, where operations at the Trondheim printing plant were discontinued in March this year. The cost effects of the printing consolidation will be realized gradually from the second quarter onwards, says Koch. S

The aforementioned sale of the 9.9 per cent stake in Finn for NOK 2.5 billion will be carried out in May. Polaris Media becomes Schibsted’s fourth largest shareholder with a share of 3.4 per cent, and is entitled to its share of Schibsted’s announced extraordinary dividend.

Polaris Media sells Finn.no shares for 2.5 billion

Paying off debt

Polaris Media’s share of the dividend is approximately NOK 690 million, of which 90 per cent is expected to be paid out in June and the remainder in the third quarter of this year. The dividend will be used to repay the group’s long-term bank loan of NOK 629 million.

– We are very satisfied with this transaction. We exchange an illiquid position in Finn for fully liquid listed shares in Schibsted, and we pay off our bank debt. This gives us strong financial flexibility for the further development of Polaris Media as a media group, says Per Axel Koch.

MN24 and the partner newspapers Adresseavisen, Avisa Sør-Trøndelag, Bladet, Brønnøysunds Avis, Fosna-Folket, Frøya, Hitra-Frøya, Innherred, Klæbuposten, Opp, Steinkjer24, Stjørdals-Nytt and Trønderbladet are owned by Polaris Media, and employees of these newspapers can own shares in Polaris Media.