Battle scarred

The Q2 2006 net profit of Polish media group Agora, the publisher of Gazeta Wyborcza, fell to zł.8.8 million, which is an 80-percent slump compared to the same period last year. The group also saw its revenues fall to zł.294 million from zł.325 million a year ago.

Agora's results over the last six months have been heavily hit by a dailies war with German publisher Axel Springer. "Worse than expected copy sales, lower revenues from books sold along with Wyborcza and hefty spending on promotion weakened Agora's bottom line," said Włodzimierz Giller, an analyst at Deutsche Bank Securities in Warsaw. "I think that together with a cut in the ad forecast it may push Agora's share price significantly lower," he added.

In February the company pulled the plug on its new daily, Nowy Dzień, 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 in order to compete with the new daily Dziennik, launched by Axel Springer.

But Agora's management is determined to boost operating efficiency to improve future results. "The cost-cutting program will need some time to bring effects. They will be visible in 2007," said deputy CEO, Zbigniew Bšk

Axel Springer, on the other hand, encouraged by the success of its tabloids and new daily in Poland, is now eying France for new opportunities. In spite of additional expenditures related to the launching of Dziennik, the German publisher saw a slight year-on-year rise in its H1 EBITA to EUR 177.8 (zł.697) million against EUR 173 (zł.681) million in H1 2005. (Reuters)