Safety net

Media group Agora, the publisher of the daily Gazeta Wyborcza, has become the worst performer on the Warsaw Stock Exchange (WSE) this year, after a battle with German media colossus Axel Springer severely dented earnings. The company's shares have lost over 50 percent of their value so far this year, under-performing the market as a whole by 64 percent.

As of midday Friday, the stock was down by 1.75 percent to zł.32.62 per share, valuing the company at approximately zł.1.86 billion, which is still about 98 times estimated 2006 earnings. The average for the index is about 13 times estimated 2006 earnings.

The company's financial results were hit hard after Axel Springer launched the Dziennik daily, a direct competitor to Gazeta Wyborcza, and the two firms became entangled in a price war. In the second quarter this year Agora's net profit sank 82 percent to zł.8.8 million. The company now says it will lay off 250 of its 3,600-strong staff this year and cut costs by around zł.35 million next year.

However, Agora's CEO, Wanda Rapaczyńska, sounded an optimistic note. "I'm very pleased with the place where we are right now. We are selling more than 400,000 copies, and Dziennik is selling 200,000. Our share in the press-advertising market is 42 percent, while Dziennik has just one [percent]," she said.

Recently, the company announced that it would focus on increasing its internet presence in order to raise revenues from web advertising. "In the next two to three years we want to boost our share in the web-advertising market to become one of the top three players," said Rapaczyńska. (Reuters)