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Swedish b’caster sees upside

TV4 posts bigger profits but flat revs

AMSTERDAM — Net profit at Scandinavia’s biggest commercial network TV4 Sweden rose to 35.7 million Swedish kroner ($4.4 million) in the first half year 2003, up from a loss of $417,599 a year earlier.

It was an indicator that TV4’s cost-cutting programs are working, but the earnings were on the back of flat net revs that climbed a weak 1% to $135 million, a sign of an ad market that is still uncertain.

“The market is stable, there is no expectation of a decline in advertising revenues, but it’s short term, and no one is willing to predict an increase,” said Daniel Ek, a senior analyst at Swedish investment bank Carnegie.

The net’s biggest stakeholder is the Bonnier Group, Scandinavia’s largest media company.

TV4 Sweden also reported a drop in net profit from $4.5 million in second-quarter 2002 to $3.54 million a year on, once again on flat revenues that slightly dipped from $72.3 million year on year to $72.2 million in 2003. The drops in profit in the second quarter was due mainly to increased taxes year on year but also some costs of the startup of TV4’s new channel TV Plus.

Profit before tax was more interesting, jumping to $6.1 million in first half year, up from a loss of $318.629 in the same period a year earlier. Second quarter pretax profit rose from $4.5 million in 2002 to $4.9 million a year later.

TV4 said it expected ad sales in July and August to be flat. Given that, “TV4 is really going to have to come up in September to compensate,” says Ek, if it wants to turn in a quarter that shows real growth in the third quarter.