NHST Media Group - Quarterly Report 2nd quarter 2020

NHST Media Group recorded progress in several areas in the second quarter of 2020, despite a continued demanding market situation due to Covid-19.

Demand for news services increased significantly in the first months of the year and remained high in the second quarter. Revenues from digital subscriptions rose, while revenues from print publications continued to fall, in line with the long-term trend. In total, user revenues were 1.7 per cent higher than for the same period last year. Advertising revenues were strongly affected by the pandemic and were almost halved compared to the second quarter of 2019.

- We work systematically and well in a demanding period. I am impressed by our organization`s ability to develop important journalism and deliver good user experiences despite challenging working conditions. The cost measures implemented have started to deliver results. In addition, the rights issue completed this quarter has given us the headroom to ensure good operations and enable necessary investments to maintain and further develop important leadership positions in the market, says Hege Yli Melhus Ask, CEO of NHST Media Group.

Earlier this year, the NHST Group decided to launch extensive measures expected to reduce cost by more than NOK 100 million in 2020. The programme includes reductions in personnel costs through, among other things, postponement of new hires, permanent and temporary layoffs and voluntary reductions in salaries in a number of the Group's units, in addition to several other cost reducing measures. The measures have shown results as planned in the second quarter, causing the operating expenses for the period to be significantly lower than originally planned for the year, and lower than the level for the same period last year.

The Group's operating revenues for the second quarter of 2020 came in at NOK 270.1 million, down by 10.3 per cent compared to the second quarter of 2019. The decline was entirely due to the loss of advertising revenues. For the first six months of 2020, the Group recorded operating revenues of NOK 551.4 million, 7.0 per cent lower than for the corresponding period last year.

NHST Media Group's operating profit before depreciation and amortisation (EBITDA) amounted to NOK 23.4 million for the second quarter, compared to NOK 27.7 million for the second quarter of 2019. Operating profit was NOK 7.7 million, down from NOK 10.9 million for the same period last year. For the first half of the year, the Group's EBITDA amounted to NOK 27.1 million and the operating profit was minus NOK 86.3 million, compared to NOK 21.2 million and minus NOK 12.2 million respectively in the same period last year.

In the second quarter, the Group completed a rights issue of NOK 50 million. The issue was fully underwritten by a group of seven of the Group's largest shareholders. At the same time, the Group's NOK 250 million loan agreement with DNB was extended by one year to 31 December 2022.

In June, NHST Media Group signed an agreement to sell its shares in Morgenbladet to Mentor Medier. The agreement was completed as planned on 30 June and resulted in a small capital gain for the second quarter. The agreement ensured that Norway's oldest national newspaper was taken over by another good media house.

The transactions completed in the quarter provide the group with a solid liquidity position and a good foundation for meeting the future market conditions.