Bad news for Agora

The publisher of Gazeta Wyborcza has been seriously hit by the war in the daily-newspaper market and saw its Q1 net profit tumble to zł.0.8 million from zł.43.3 million a year ago.

In February Agora pulled the plug on its new daily Nowy Dzien, after just three months of its presence on the market - the failed project cost the company zł.22 million. In April it cut the price of its flagship publication Gazeta Wyborcza by as much as 46 percent to zł.1.5, in order to compete with the new quality daily Dziennik, launched by the German media concern Axel Springer.

"Competition is no novelty, and Gazeta's sales results show it has a strong position. We are acting to protect Agora's business in the long term. Does it mean that we can witness short-term volatility? Yes," Agora's CEO Wanda Rapaczyńska said.

According to media reports, average daily copy sales of Axel Springer's Dziennik stood at some 300,000 during the first week after its launch while in April Gazeta Wyborcza sold 500,000 copies per day.

Last week, the news broke that of the world's largest headhunting companies, Korn/Ferry, has been hired by Agora to seek candidates for the company's new CEO, as Wanda Rapaczynska is planning to retire.

"The information that Rapaczynska - one of Agora's pillars and a chief executive praised by capital markets - is preparing to quit does not help," said Tomasz Bardziłowski, head of equity research at CA IB Securities.

Although the search is being conducted worldwide, a very possible scenario is that a current Agora manager will take the post. (Reuters)