MADRID — Confirming Spanish media’s emergence from a 2001-02 ad downturn, the Prisa Group, Spain’s second largest media company, posted highly healthy first-half results, aided by a strong performance of its special promotions.
The encouraging results come as Prisa is in advanced talks to increase its already significant radio presence in Latin America.
1Q revenues increased 11.3% to Euros723 million ($887.1 million), bulwarked by a 9.1% consolidated rise in ad income, led by hikes at “El Pais,” Spain’s most-read quality newspaper (up 8.5%), radio net Radio de Espana (up 4%) and local TV network Localia (up 67.3%).
Daily newspaper and radio advertising in Spain rose in general by 5.3% and 5.8% over the first six months of 2004, per an InfoAdex study. Analysts expect Spain’s ad recovery to continue in the second half of the year.
First six month earnings before interest and taxes (EBIT) stood at $123.9 million, up 56% on the same period in 2003, prompting a sharp increase in EBIT margins from 10% to 13.9%. Net profits reached $55.2 million, a 34% improvement on a year before.
Highlights in Prisa’s media performance included Localia, its fast-growing and profitable start-up local TV network in Spain.
Special promotions — the southern European phenomenon of kiosk sales of encyclopedia fascicles and DVD tie-ins, bundled with newspapers — raised a total $101.8 million.
Announced earlier last week, Sogecable, in which Prisa holds a 20% stake, announced net losses of $100.6 million, in line with analysts’ expectations.
With money to spend, Prisa is in advanced talks to take over Spanish telco Telefonica’s radio net in Argentina, Radio Continental, adding it to Prisa’s brace of Latin American radio interests, which rep its major growth bizz in the region, including Radiopolis in Mexico, Grupo Latino de Radio in Colombia and Bolivia’s Grupo Multimedia.
Keen to continue its media divestments, Telefonica is up for the sale. The deal could require a change in Argentine legislation, but Argentina’s government is said to look kindly on the agreement.