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
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
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
Alma Media Groups interim report for January September will be
published on 9 November 1999.
ALMA MEDIA OYJ
Vice President, Corporate Communications
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