INTERIM REPORT JANUARY - AUGUST 1997 The Groups operating profit for the first eight months of the yea totalled FIM 106 million, up 31 % on the same period in 1996 (January - August 1996: FIM 81 million). Consolidated net sales were FIM 1,038 (1,030) mi
AAMULEHTI GROUP STOCK EXHANGE RELEASE
8 October 1997, At 12.00 am local time
INTERIM REPORT JANUARY - AUGUST 1997
The Groups operating profit for the first eight months of the yea
totalled FIM 106 million, up 31 % on the same period in 1996
(January - August 1996: FIM 81 million). Consolidated net sales were
FIM 1,038 (1,030) million. Earnings per share were FIM 7.33 (5.03).
The Groups solvency ratio on 31 August 1997 was 56 % (45 % on 31
December 1996). The profit for the full year is expected to be
distinctly higher than in 1996.
The consolidated net sales for January - August totalled FIM 1,038
(1,030) million. Growth was particularly noticeable in Alpresss net
sales, compared to the same period last year. All the newspapers
increased net sales on the equivalent period in 1996, in addition to
which Satakunnan Kirjateollisuus Oy was consolidated for the full
eight-month period. The comparable period included the net sales of
the Aldata division, FIM 73 million, which was divested at the
beginning of the current year. Exports accounted for FIM 214
million, or 20 %, of consolidated net sales (FIM 225 million, 22 %).
The Groups operating profit before depreciation was FIM 201 (163)
million, which was 19 % (16 %) of net sales. The improvement was due
to expansion and greater efficiency in Alpress. The operating profit
before depreciation includes other income from operations totalling
FIM 3 (6) million. Other income does not include non-recurring
items. The Aamulehti Groups share of its associated company results
is recorded for the first time in the operating profit before
depreciation. This share was FIM 8 (2) million. The comparable
figure has been adjusted in line with current accounting practice.
Depreciation totalled FIM 95 (82) million, the increase being due to
the consolidation of Satakunnan Kirjateollisuus Oy and to an
increase in goodwill writeoffs, which totalled FIM 9 (4) million.
The operating profit was FIM 106 (81) million, 10 % (8 %) of net
sales. The Groups net financial expenses amounted to FIM 6 (18)
million and the profit before extraordinary items and taxes was FIM
100 (63) million.
Extraordinary income came to FIM 40 million, and included a FIM 39
million gain on the disposal of the Suomen Aldata Oy shares. There
was no extraordinary income during the comparable period. The pre-
tax profit was FIM 136 (63) million. FIM 30 (18) million, ie. 28 %
of the result of operations, was deducted as tax. In the comparable
period tax was calculated as 28 % of the profit for the period. The
net profit for the period was FIM 105 (45) million. Earnings per
share totalled FIM 7.84 (6.41), calculated by the number of shares
on 31 August, and FIM 7.33 (5.03) calculated by the number of shares
following the FIM 7 million increase in share capital registered on
24 September 1997.
Group capital expenditure totalled FIM 63 (205) million. FIM 30
million of this was required for investments in shares. The high
figure in the comparable period was due to the acquisition of the
Satakunnan Kirjateollisuus Oy shares during that period.
Financing and balance sheet
A strong cashflow coupled with realization of shares kept the
Groups financial position strong throughout the period. The largest
single financing items, in addition to certain loan repayments, were
the payment of the previously acquired shares in MTV Oy and a final
FIM 35 million payment for the Satakunnan Kirjateollisuus Oy shares
Net financial expenses were FIM 6 (18) million, ie. 0.6 % (1.6 %) of
the Groups net sales. The fall in financing expenses was
principally attributable to a reduction in interest-bearing debt and
to lower interest rates.
The Groups cash funds totalled FIM 34 (72) million at the close of
the period. FIM 106 million in principal on interest-bearing loans
was paid off, leaving a total of FIM 347 (565) million at the end of
August. The average interest payable on the Groups interest-bearing
loans was 3.6 % (5.0 %). Net gearing (shareholders equity divided
by interest-bearing net debt) was 40 % (89 %). The Groups solvency
ratio was 56 % (45 % on 31 December 1996). Shareholders equity per
share at the end of August amounted to FIM 88.12 (FIM 89.91 on 31
December 1996). Bonds converted into shares between January and
August raised the number of shares registered during this period by
1.4 million. The balance sheet totalled FIM 1,519 million at the
close of the period (FIM 1,603 million on 31 December 1996).
The Aamulehti share
Trading of Aamulehti Corporation shares on the Helsinki Stock
Exchange during the period totalled FIM 476 (121) million. At the
end of August the Series I share was quoted at FIM 175 and the
Series II share at FIM 172. The Series I share had a lowest and
highest price of FIM 143.00 and FIM 200.10 respectively during the
period, and the Series II share had a lowest and highest price of
FIM 138.60 and FIM 204.00. The total market capitalization of the
two series at the end of August was FIM 1,543 (814) million. Nominee-
registered shares accounted for 20 % (25 %) of the share capital at
the close of the period.
Increases in the companys share capital totalling FIM 14 million
were registered during the period as a result of bond conversions.
The registered share capital of Aamulehti Corporation at the close
of the period was FIM 89 (71) million. The conversion period of the
convertible bonds ended on 31 August 1997 under the terms of the
merger of Aamulehti Corporation and MTV Oy. After the preceding
increase in share capital was registered, convertible bonds were
converted into shares by the end of August for a total nominal value
of FIM 29 million, which corresponded to 716,450 Series II shares.
This FIM 7 million share capital increase was registered in the
Trade Register on 24 September 1997.
Following this registration the companys share capital totalled FIM
96 million, comprising 4,155,585 Series I shares and 5,457,313
Series II shares. There are altogether 9,612,898 shares. The Board
of Directors has no authorization to raise the share capital.
The Group had an average of 2,167 (2,132) full-time employees and
951 (771) part-time employees. The increase in these figures was due
to the inclusion of Satakunnan Kirjateollisuus Oy within the Group.
All members of Aamulehti Corporations Board of Directors resigned
from the Board, as required by the merger process. The Supervisory
Board elected Pekka Ala-Pietilä, Pirkko Alitalo, Bengt Braun, Matti
Häkkinen, Pentti Kivinen, Björn Mattsson and Olli Reenpää as members
of the Aamulehti Corporation Board of Directors with effect from 28
The individuals thus elected will also constitute the first Board of
Directors of Alma Media Oyj, as stipulated in the merger agreement.
Alma Media Oyj is scheduled to start operating on 1 April 1998. The
new Board of Aamulehti Corporation elected Björn Mattsson as its
Chairman and Bengt Braun as its Deputy Chairman.Pentti Kivinen
requested permission to resign from the Supervisory Board from 28
August 1997, having been elected to the Board of Directors of
According to Gallup Mainostieto (Gallup Advertising Information),
media advertising increased in Finland by 7.7 % during the review
period. Magazine advertising rose 21.7 %, television advertising
11.7 % and newspaper advertising 4.4 %. According to Sanomalehtien
Liitto (Association of Finnish Newspapers), newspaper advertising
revenue rose by an average of 3.8 % during the first half of the
year. The circulations of daily newspapers fell by a good one per
cent in Finland.
Alpresss operations developed better than predicted and also better
than average in its sector during the period. Alpress had net sales
of FIM 650 (561) million between January and August. Its circulation
sales were 13.0 % and its advertising sales 16.8 % higher than
during the comparable period. The comparable growth figures,
eliminating the effect of the Satakunnan Kirjateollisuus Oy
newspapers, were 5.3 % and 8.1 % respectively. All Alpresss major
titles increased both circulation and advertising sales and the
operations of Suomen Paikallissanomat Oy, which publishes regional
and local newspapers, showed an increase in volume. Approximately
half of the increase in Alpresss net sales was attributable to the
presence of the Satakunnan Kirjateollisuus Oy newspapers for the
entire review period.
Compared to the same period in 1996 Aamulehtis weekday circulation
rose 1.4 %, Kauppalehtis circulation 0.3 % and Iltalehtis six-day
circulation 6.0 %. Satakunnan Kansa
circulation fell 0.3 % and Lapin Kansas circulation fell 2.5 %. The
circulations of the Suomen Paikallissanomat Oy newspapers developed
Aamulehti and Iltalehti showed the most positive development among
the Alpress newspapers. Aamulehtis circulation began to rise
clearly, after several years of continued decline, and its
advertising sales increased by more than 8 %. Besides market
conditions in general, this was also attributable to new advertising
products developed jointly by the editorial and marketing
departments. Despite tough competition on price Iltalehtis
circulation increase was the highest in its sector. Iltalehtis
circulation does not include extra campaign circulations.
Kauppalehtis circulation showed modest growth but preparation for
the imminent new competition has raised cost levels, and in
consequence Kauppalehtis result remained at last years level.
Satakunnan Kansa, Lapin Kansa and the Suomen Paikallissanomat group
all recorded higher net sales and profits compared to the same
period last year. Alpress Oy also owns 43 % of Pohjolan Sanomat Oy,
which showed a slight loss for the January - August period.
Alpresss electronic newspapers have more than 300,000 registered
readers and some 20,000 - 30,000 Internet users read them daily.
During the period part of Kauppalehti Online became subject to
charge. This did not, however, have any significant impact on the
number of daily readers.
Aamulehti began its own training scheme for editorial staff. There
were more than 1,000 applicants for this course, of whom 11 were
accepted. The one-year course began in September.
Alpresss operating profit in the January - August period was FIM 80
(40) million. The reasons behind this extremely encouraging growth,
in addition to the increase in net sales, were higher operational
efficiency and reduced printing costs; in Aamulehtis case, the
effect of previously implemented cost cuts now also covered the
entire period. Compared to last years period the greatest profit
increases were recorded by the Aamulehti, Iltalehti and Satakunnan
The overall market for newspapers and sales promotional products in
Finland remained unchanged. Printing overcapacity during the summer
months slackened demand for magazine products, as happened last
year. Increased printing capacity for magazines and promotional
materials in the Scandinavian markets has caused a
reduction in price levels. Growth in demand for newspaper products
in the Russian market is levelling off and price levels were
slightly lower than during the comparable period. Demand for
magazines is recovering, however, and prices remained at last years
levels. Both the Alprint Newspaper Printing Group and the Alprint
Magazine Printing Group gained several major orders from Russia at
the very end of the period.
Alprints net sales during the period totalled FIM 549 (546)
million, including FIM 176 (170) million in intragroup sales. FIM
270 (234) million of this was contributed by the Magazine Printing
Group and FIM 282 (289) million by the Newspaper Printing Group. The
parent company, Alprint Oy, had net sales of FIM 17 (17) million.
The Pori units were included for the full period, whereas during the
comparable period they were consolidated from 12 June 1996. The
Magazine Printing Groups net sales increased almost 15 %, largely
thanks to the Pori units, whereas the Newspaper Printing Groups net
sales declined only slightly despite the fact that this Groups net
sales in the comparable period included roughly FIM 30 million in
one-time deliveries to Russia.Exports accounted for FIM 214 (225)
million, ie. 39 % (41 %), of
Alprints net sales and were distributed as follows: Russia 50 %
(61 %), Scandinavia 39 % (35 %), and the rest of Europe 11 % (4 %).
Of Alprints total net sales, 32 % (31 %) came from intragroup
deliveries, and 29 % (28 %) from other Finnish publishers.
Roughly one-third of the paper consumed by Alprint is used to print
the Aamulehti Groups own newspapers. Paper prices were roughly 10 %
lower than during the comparable period.
During the period Alprint transferred its Sarankulma printing
operation to another property owned by the Group and the Sarankulma
facilities were leased to an outside company. Capital expenditure by
Alprint totalled FIM 12 million and mainly involved the construction
costs of the Sarankulma premises and modification work to the
binding line transferred from Pori to Sarankulma.Alprints operating
profit was FIM 49 (59) million. The shortfall was due to lower than
forecast sales by the Magazine Printing Group during the summer
months and prices of newspaper products in Russia, which were lower
than during the comparable period.
Alexpress engages in local radio broadcasting activities in
Helsinki, Tampere and Oulu, and in the production of short-message
services. Alexpress is additionally responsible for most of the
Aamulehti Groups R&D investments in new media. Alexpress Oy also
owns 20 % of Radio Nova, a national commercial radio channel which
started broadcasting in May 1997. Alexpresss net sales between
January and August totalled FIM 9 (5) million. It recorded a loss of
FIM -7 (-8) million.
The Aamulehti Groups share of the results of its associated
companies for the January - August period are included under the
operating profit before depreciation. The most important associated
company is MTV Corporation, in which the Aamulehti Group holds 20 %.
The MTV Groups consolidated net sales for the January - August
period totalled FIM 668 (596), the operating profit was FIM 50 (22)
million, and the net profit for the period was FIM 40 (23) million.
The MTV Group contributed FIM 6 million
to the Aamulehti Groups January - August result. MTVs full-year
result is expected to be clearly higher than last year.Other
associated companies and holdings which had an impact on the
operating profit before depreciation were Suomen Tietotoimisto Oy
(24 %), Tampereen Tietoverkko Oy (35 %), Pohjolan Sanomat Oy (43 %),
and Oy Suomen Uutisradio Ab (20 %). The Groups share of the Alcap
Groups result is recorded as a financial item.
Aamulehti Corporation, the Groups parent company, had net sales of FIM 41
(47) million, mainly comprising rental income and invoicing for
administrative services. The parent company recorded an operating
loss of FIM -15 (-9) million.
On 22 April 1997 the Boards of Directors of Aamulehti Corporation
and MTV Oy agreed to join the two companies in a combination merger
to form a new communications group called Alma Media Oyj.
Extraordinary shareholders meetings of the two companies approved
the merger on 18 June 1997. Alma Media Oyj is scheduled to start
operating on 1 April 1998. Under the terms of the agreement, the
Aamulehti Corporation shares will be exchanged for Alma Media Oyj
shares on a 1:1 basis and the MTV Oy shares on a 1:137.5 basis.
Application will be made for listing of the new companys shares on
the Helsinki Stock Exchange.
In August 1997 the Council of State (the Finnish government)
approved the transfer of MTV Oys operating licence, which was a
condition of the merger agreement. This was accomplished by first
renaming MTV Oy as MTV-Yhtymä Oy (in English MTV Corporation), after
which MTV Corporation established a subsidiary called MTV Oy. MTV
Corporations operations and operating licence were transferred to
MTV Oy with effect from 1 September 1997. MTVs operating licence is
valid on its existing terms until 14 December 1999.
As required by the merger process, all members of the Boards of
Directors of both Aamulehti Corporation and MTV Corporation
resigned to allow their positions to be refilled. The Supervisory
Boards of the two companies then elected individuals from both
boards as the members of the Board of Directors of Alma Media Oyj
with effect from 28 August 1997, as stipulated in the merger
Prospects to year end
Alpresss newspaper circulation and advertising revenues have
demonstrated positive growth during the year and these revenues are
forecast to continue growing during the final months of the year.
Alpresss net sales for the full year are expected to exceed FIM 1
billion for the first time and its operating profit should be
appreciably higher than last year.
Demand for graphic services in Finland is predicted to improve
during the remainder of the year in both the newspaper and magazine
markets. No major changes are expected in western
markets. Nor should substantial changes take place in Russia,
although the major printing orders won during the summer would
appear to ensure that Alprints net sales might even exceed last
years level. The operating profit, however, will most probably
remain somewhat below last years figure
The Groups consolidated net sales for the current year are expected
to match the level in 1996. The consolidated operating profit in
1996, FIM 178 million, included a one-time gain of FIM 45 million on
a property sale and the pre-tax profit came to FIM 159 million. This
year the Group recorded a gain of FIM 39 million on the divestment
of the Aldata division under extraordinary income. As a result of
this difference in accounting procedures, the Groups operating
profit will remain slightly lower than last year but its pre-tax
profit will be distinctly higher despite the fact that items
recorded in the January - August period, as well as extraordinary
merger expenses totalling more than FIM 10 million, will have a
negative impact on the result for the full year.
GROUP INCOME STATEMENT, MFIM 1997 % 1996 % 1996 %
8 mo. 8 mo. 12 mo.
Net sales 1,038 1,030 1,623
before depreciation 201 19.4 163 15.8 313 19.3
Depreciation -95 -82 -133
Operating profit 106 10.2 81 7.9 180 11.1
Financing income/expenses -6 -18 -25
Profit before extraordinary
items and taxes 100 9.6 63 6.1 155 9.6
Extraordinary income 40 - 7
Extraordinary expenses -3 - -3
Profit before taxes 136 13.1 63 6.1 159 9.8
Taxes for the period -30 -18 -47
Minority interest -1 - -1
Profit for the period 105 10.1 45 4.4 111 6.8
GROUP BALANCE SHEET, MFIM 1997 1996 1996
31 Aug. 31 Aug. 31 Dec.
Fixed assets and other
long-term investments 1,248 1,260 1,288
Valuation items 7 12 9
Inventories 31 49 42
Receivables 199 164 160
Financial assets 34 72 104
1,519 1,557 1,603
SHAREHOLDERS EQUITY AND LIABILITIES, MFIM
Shareholders equity 784 595 674
Minority interest 21 26 21
Obligatory provisions 5 5 5
Long-term liabilities 311 562 463
Current liabilities 398 369 440
1,519 1,557 1,603
CAPITAL EXPENDITURE, MFIM
1997 1996 1996
8 mo. 8 mo. 12 mo.
Gross capital expenditure
on fixed assets 63 205 338
SHARE INDICATORS, FIM 1997 1996 1996
8 mo. 8 mo. 12 mo.
EPS 7.84 6.41 16.04
EPS, diluted 7.33 5.03 12.74
Equity/share 88.12 83.35 89.91
NET SALES BY DIVISION, MFIM 1997 1996 1996
8 mo. 8 mo. 12 mo.
Alpress 650 561 902
Alprint 549 546 848
Aldata - 73 114
Alexpress 9 5 11
Parent company 41 47 66
Intragroup sales -211 -202 -318
Total 1,038 1,030 1,623
OPERATING PROFIT BY DIVISION, MFIM
8 mo. 8 mo. 12 mo.
Alpress 80 40 78
Alprint 49 59 94
Aldata - 1 3
Alexpress -7 -8 -13
Parent company -15 -9 29
Group bookings and
associated companies -1 -2 -11
Total 106 81 180
PERSONNEL BY DIVISION 1997 1996 1996
8 mo. 8 mo. 12 mo.
Alpress 1,102 1,056 1,046
Alprint 963 869 919
Aldata - 133 132
Alexpress 66 50 59
Parent company 36 24 25
Total 2,167 2,132 2,181
Part-time deliverers 951 771 848
GROUP CONTINGENT LIABILITIES, MFIM
1997 1996 1996
31 Aug. 31 Aug. 31 Dec.
Against own debt
Assets pledged 19 19 19
Mortgages on land
and buildings 160 295 275
Chattel mortgages 136 104 92
On behalf of others
Mortgages on land and buildings - 15 -
Guarantees 4 4 4
Other own commitments
Leasing commitments 6 2 8
Buyback commitments 44 1 45
Other commitments - 4 4
Total 369 444 447
DUE DATES OF GROUP LEASING PAYMENTS, MFIM
Payments due between
1 September and 31 December 1997 1
Payments due after 1997 5
Foreign currency loans totalling MFIM 28 and corresponding interest
expenses are protected against exchange rate fluctuations using
forward contracts and currency swaps. The exchange rate differences
on loans and the derivative results compared to the balance sheet
exchange rates are entered under Other Financial Income and
Expenses. MFIM 8 in foreign currency sales receivables due in 1997
The figures in this interim review are unaudited.
Vice President, Corporate Communications
ENCLOSURE: MTV Corporation: President's Review 3/1997, 1.1.-31.8.1997
President and CEO Matti Packalen, tel. +358 9 507 8715
CFO Ritva Sallinen, tel. +358 9 507 8768
Distribution: Helsinki Stock Exchange, Principal Media
President's Review 3/1997, 1.1.-31.8.1997
Media advertising and television viewing
A total of FIM 3.0 billion was spent on media advertising in Finland
in January-August 1997, according to Gallup Advertising Information.
Media spending rose by 8.0% compared with the previous year. MTV3
Finland recorded sales of FIM 640 million during the period, up
The MTV3 Channel was on the air an average of 18 hours a day in
January-August. Air-time rose by 19% over the previous year. MTV3's
audience share during the period was 41%, which was roughly the same
as the year before. The domestic content of programming was 55%.
MTV Group's turnover and profits
The MTV Group's turnover amounted to FIM 667.8 million during the
first eight months of the year (compared with FIM 595.9 million in
January-August 1996). This signified an increase of 12.1%. Other
operating income amounted to FIM 11.5 million.
The operating margin was FIM 68.8 million (FIM 38.9 million) and the
net operating profit was FIM 50.1 million (FIM 22.4 million). The
Group's profit before extraordinary items and taxes came to FIM 59.2
million (FIM 31.5 million). The profit for the period was FIM 40.5
million (FIM 22.7 million) and the profit per share was FIM 686 (FIM
412). The profit for the period was improved by a change in
accelerated depreciation amounting to FIM 9.5 million. This was
booked by MTV Corporation in connection with the transfer of
business operations. Extraordinary income was related mainly to the
merger of MTV Corporation and Aamulehti Corporation which is set to
take place on about 1 April 1998.
At the end of the period the Group had a balance sheet total of FIM
million 502.7 million (FIM 532.1 million at 31 December 1996).
Equity per share amounted to FIM 6,629 (FIM 6,315 at 31 December
1996). Imputed tax liability has not been treated as a liability.
The Group's investments and other long-term expenditure totalled FIM
23.1 million (FIM 28.6 million). Investments to replace and maintain
fixed assets totalled FIM 14.4 million, and a capital loan of FIM
8.7 million was issued to Oy Suomen Uutisradio Ab.
The Group's financial situation remained good throughout the period.
Liquid assets totalled FIM 134 million at the end of August (FIM 207
million at 31 December 1996). The Group does not have interest-
bearing liabilities. Financial income totalled FIM 9.1 million in
January-August (FIM 9.1 million).
The Group had an average of 649 employees in January-August 1997
(641 in 1996).
The MTV3 Channel
The MTV3 Channel's programming continued to attract viewers in the
summer. The supply of programming remained broad throughout the
summer, with 19% more air-time than the previous year. In spite of
beautiful summer weather, daytime programmes also found their own
audiences. McGyver and Tarzan were among summer favourites. A record
12 films were shown weekly. For the first time the channel stayed on
the air on Saturday and Sunday mornings during the summer. The
Market Parliament talk show series, which was recorded in different
parts of Finland, stimulated considerable interest. Viewers were
provided numerous activity and service programmes, with On the Road,
Down to Business and Five O'Clock Pulse among new names.
As in past years, MTV3 toured Finland to cover large-scale events
such as the Tango Market, the Sata-Häme Accordion Festival, Sysmä
Summer Sounds and the Kotka Maritime Festival. The channel looked
for the most beautiful municipality in Finland, visiting 56
localities. Kangasniemi was voted the winner by viewers. Good
Morning Finland and the Jyrki show were also broadcast from outside
Helsinki on Fridays. On Thursday evenings the Jyrki studio moved out
into the street for the Red Planet talk show, which became a major
event in the capital. Kalevankatu was closed to traffic for this
A project was carried out in the summer to evaluate the MTV3
Channel's visual appearance. The results will be visible this
The building of Finland's fourth TV channel prevented viewers from
tuning into MTV3's daytime broadcasts in Tampere and Lahti, for
example. Transmitter output was also lowered in the Helsinki and
Turku areas, weakening picture quality. Similar disturbances can be
expected during the autumn as well.
The MTV3 Channel began 16:9 wide-screen broadcasts on 18 August.
Jyrki and Electric Circus will regularly be broadcast in the 16:9
format. The EU granted the MTV3 Channel FIM 4.3 million to launch
wide-screen broadcasts and Funny Films Oy FIM 650,000 to help it
produce the Electric Circus dance programme in a wide-screen format.
The EU funds came from a programme intended to support the
introduction of the 16:9 standard.
In honour of the MTV3 Channel's 40th anniversary, the autumn
schedule is broader and more versatile than ever before. MTV3 has
also become the first channel in Finland to offer 20 hours of
continuous programming a day. The autumn season was ushered in
gradually beginning on 11 August, when Good Morning Finland and news
broadcasts returned to their normal lengths and rhythm. Other
programmes were scheduled to start in September and early October,
when news broadcasts will also be expanded to Sunday mornings.
Group and associated companies
The parent company MTV Corporation had a turnover of FIM 517 million
in January-August, up 14% over the previous year. MTV Oy changed its
name to MTV Corporation (MTV-Yhtymä Oy) in June and re-established
MTV Oy as a wholly owned subsidiary. In accordance with decisions,
MTV Corporation transferred all of its business operations to the
new MTV Oy on the basis of interim accounts prepared on 31 August
1997. The new MTV Oy, whose share capital was increased by FIM 200
million in the process, will continue television operations. The
members of MTV Oys board of directors are Matti Packalén
(chairman), Eero Pilkama and Jaakko Paavela. MTV Corporation
subscribed for all the shares, handing over its assets and
liabilities to the new MTV Oy as a subscription in kind. The Council
of State approved the transfer of the operating licence to the new
MTV Oy on the same conditions as before. The operating licence is
valid up to 14 December 1999. The transfer of operations and the re-
establishment of MTV Oy were connected to the merger of Aamulehti
Corporation and MTV Corporation into Alma Media PLC on about 1 April
1998. MTV Oy will be in charge of Alma Media's television operations
on the MTV3 Channel.
The supervisory boards of Aamulehti Corporation and MTV Corporation
elected new boards of directors for the companies on
28 August. Although the two companies still operate separately,
the same individuals were elected to both boards. Björn Mattsson was
elected chairman and Bengt Braun deputy chairman. In connection with
the merger process all the board members of both companies
relinquished their posts. On 28 August the supervisory boards
separately elected the following to serve on the boards of directors
of both companies: Pekka Ala-Pietilä, Pirkko Alitalo, Bengt Braun,
Matti Häkkinen, Pentti Kivinen, Björn Mattsson and Olli Reenpää.
A monitoring group consisting of representatives of both companies
was established to oversee the merger. Its purpose is to investigate
the current state of the companies' operations, to seek synergies
and to survey new operating models.
The MTV 2000 development project, which is now entirely in the
company's hands, yielded significant results. After a great deal of
work, new pricing and key customer systems were introduced. A
production building project was also adopted. The company's
strategic lines were summarized in a booklet which was distributed
to every employee. Indicators will be used to monitor the
achievement of goals and resulting benefits.
MTV3 Internet concluded a cooperation agreement with Bonnier Online
of Sweden. The first visible result was the opening of Children's
Tivoli, a virtual world consisting of games and educational content
which is something completely new on the Finnish scene. MTV3
Internet announced the first network business application together
with the Finnish Posts. A Webcasting distribution channel provided
by Microsoft and Netscape is scheduled to be introduced in the
autumn and a 3D service provided together with Nokia has already
been opened to the public.
MTV3 Marketing was granted an ISO 9002 quality certificate on 13
August, placing the final seal on three years of work to achieve