MTV SELLS 51 % OF MTV-VIIHDE OY AND PREPARES FOR CABLE CHANNEL, MTVS AND ALPRINTS FULL-YEAR PROFITABILITY WEAKER THAN FORECAST
ALMA MEDIA CORP. STOCK EXC BULLETIN, 9.00 AM 29 SEPT 1999 1/3 MTV SELLS 51 % OF MTV-VIIHDE OY AND PREPARES FOR CABLE CHANNEL, MTVS AND ALPRINTS FULL-YEAR PROFITABILITY WEAKER THAN FORECAST MTV Oy will sell 51 % of MTV-Viihde Oy to Pearson Television Ltd. MTV is preparing to introduce a TV channel exclusive to cable television in preparation for multichannel broadcasting. MTV and Alprint will not reach the level of profitability forecast in the interim report dated 10 August 1999. MTV Oy sells majority of MTV-Viihde Oy MTV Oy has concluded a preliminary agreement to sell 51 % of MTV Viihde Oy to Pearson Television Ltd. MTV-Viihde Oy, Finlands largest producer of entertainment programmes, recorded net sales last year of almost FIM 70 million and it has 34 employees. The divestment of MTV Viihde Oy is part of MTV Oys business strategy to concentrate its production resources on news and current affairs programmes. Most of MTV3 Channels other programmes will either be subcontracted or purchased directly from outside suppliers. MTV Oy prepares to introduce new cable television channel In preparation for multichannel broadcasting, MTV Oy is preparing to introduce a free TV channel viewable exclusively on cable networks. The national MTV3 Channel serves the public at large but the new cable channel will target more focused audiences. All Finlands cable TV companies have been contacted and distribution contracts are currently being negotiated. The channel could be introduced at the earliest in a few months from now. MTV and Alprint will not reach their profit targets In its six-month interim report published on 10 August 1999 Alma Media Corporation forecast that MTVs profitability would improve during the second half of the year. Television advertising has lost market share in recent months. In August the media markets grew by 1.7 % while television advertising fell by 8.4 %. Ad Facts Ltd reports that between January and August this year media advertising spending increased by 5.5 % on the same period last year. Newspaper advertising rose 6.3 %, magazine advertising 4.4 %, radio advertising 3.8 % and television advertising 3.1 %. MTV3 Channels strategy in this new competitive situation will be to maintain its high audience share. For this reason MTV Oy has continued with its programme investments despite the rise in programme costs. MTV3 Channels audience shares have developed positively. Between January and August this year its audience share was 41.7 % (January August 1998: 40.9 %). MTV Groups result of operations for the full year will be lower than forecast owing to the decrease in television advertising revenue and its additional programme investments. Television advertising is not expected to pick up until next year. This view is supported by the Association of Finnish Advertisers annual advertising barometer, in which the largest advertisers are asked to state their budgeted advertising expenditure for the following year. Exports of printed products to Russia have continued to decline. The decrease, and the overcapacity it has caused in Finlands adjacent markets, have weakened profitability in this sector. Consequently, Alma Medias graphic products division Alprint will post a lower profit for the full year than forecast. The market situation is not expected to improve rapidly. At the end of 1998 Alprint embarked upon an extensive programme of measures to improve its cost structure and competitive efficiency. Part of this programme involves concentrating Alprints Vantaa and Pori heat set rotation presses in a single unit in Tampere. The new magazine rotation press, purchased to replace a previous unit at the Tampere unit, will be started up late next year. Alprints printing operations in Jämsä and Valkeakoski were moved this autumn to a new special products unit set up in Tampere. All sales and marketing functions have been centralized. Alprints production units have been regrouped by production technology into four product lines and preparations to merge Alprint Oy, Alprint Magazine Printing Group and Alprint Newspaper Printing Group into a single company are now under way. These measures will have their full impact on Alprints profitability after the year 2001. The operations of the New Media business unit, established in September, will develop as forecast. Newspapers have continued to show further positive development. Alma Medias newspaper publishing division, Alpress, has performed clearly better than one year ago. However, this will not be sufficient to compensate for the shortfall recorded by the other divisions. Alma Media Groups interim report for January September will be published on 9 November 1999. ALMA MEDIA OYJ Ahti Martikainen Vice President, Corporate Communications Further information: Mr Matti Packalen, President and CEO, tel. +358-9-507 8715 Ms Ritva Sallinen, CFO, tel. +358-9-507 8708 Distribution: Helsinki Exchanges, principal media
- Date: 29.9.1999, 08:00
- News type: Stock exchange release
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