Polish publisher Agora back to quarterly profit

Posted by Erina Lin on February 23, 2010 at 1:52 PM

Net income totaled 14.9 million zloty, or US$5.1 million, up from a net loss of 30.7 million zloty a year earlier, the company statement said.

According to Seven analysts surveyed by Bloomberg, the median estimate for Agora's profit was 12.5 million zloty.

Sales decreased 13 percent to 291.1 million zloty, partly because advertising revenue, making up about two-thirds of the company's sales, dropped 17 percent. Agora said it doesn't expect "any significant improvement in advertising" this year, Bloomberg reported.

"That also means that we don't see significant improvement in revenue this year," said Chief Executive Officer Piotr Niemczycki on a teleconference.

Costs were down 25 percent to 271.6 million zloty after Agora eliminated jobs by 15 percent and slashed promotion expenses by a third, the company said.

"These costs can be easily cut in poor market environment, but will explode when the market improves," said Andrzej Szymanski, an analyst at Bank Zachodni WBK SA, in a note. "Without improvement on the ad market its cost cutting effects will have diminishing impact on profit improvement." Szymanski maintained his outlook for the company "negative" in the coming quarters.

Agora aims to keep controlling costs this year, according to Niemczycki.