German media group Axel Springer cut its full-year revenue forecast today after a first half burdened by costs from a Swiss joint venture.
The board "slightly adjusted the revenue forecast and expects stable development rather than the slight growth originally predicted," the group said in a statement with its second-quarter results.
Between April and June, Springer posted a net profit of 63.8 million euros (USD 71.5 million), a fall of 6.2 per cent compared with the same period in 2015 and short of the 81 million predicted in a Factset survey of analysts.
Revenue increased by 0.7 per cent to 801.9 million euros, while underlying, or operating, profit as measured by EBITDA was steady at 147 million euros.
That contributed to a first half that saw revenues grow just 0.5 percent to 1.59 billion euros, burdened by currency effects and "significant deconsolidation effects" from the founding of Springer's Swiss joint venture with fellow publisher Ringier.
Adjusting for these effects, Springer said its revenues would have increased by 5.3 per cent.
The group boosted its net profit in the first half from 111 million euros in 2015 to 273 million euros this year, helped by one-off items like the sale of Indian car trading website CarWale and income linked to the joint venture.
Springer said it would maintain its objective of 5.0 per cent growth in operating profit for the year, despite seeing an increase of just 0.5 percent over the first half.
The group has put its faith in digital offerings, which now account for 67 per cent of its revenue.
"We're confident that our investments in digital growth are increasingly paying off," chief executive Mathias Doepfner said in a statement.
Analyst Harald Heider of DZ bank agreed, saying that the "solid" second-quarter results kept Springer on track for its targets.
