NHST MEDIA GROUP - QUARTERLY REPORT 2ND QUARTER 2019
The NHST Media Group is currently undergoing an extensive restructuring process aimed at ensuring an increased share of digital content revenues, improved profitability and an increased growth rate in the longer term. The results for Q2 2019 were affected by this process. The Group posted revenues of NOK 301.3 million and an operating profit of NOK 10.8 million in the second quarter, against NOK 332.5 million and NOK 13.2 million, respectively, in the same period last year.
“Despite a continued decrease in revenues, I’m pleased to note that we have a positive development in revenue from digital subscriptions, both as a result of growth in our publications and because of the inclusion of Mention in the Group. In addition, the cost reducing measures are beginning to have an effect on profitability, for the time being primarily in the Software-as-a-Service (SaaS) segment,” says Group CEO Hege Yli Melhus Ask in NHST Media Group.
A number of measures are being implemented across the Group aimed at equipping NHST for the future, and increased digitisation is the common theme in all the changes that the Group is implementing. The changes implemented entail increased investments in areas where the Group needs to strengthen its competence, technology and competitiveness to secure growth and transformation. In addition, a number of profitability improvement measures are implemented.
In the second quarter, the measures which have been implemented are expected to result in increased productivity and reduced costs for the Group over time. In Dagens Næringsliv (DN), as one of the first publications in the world, automated page production of parts of the print editions has been introduced, and the same digital publication platform as in DN, has been taken into uses in the first publication for Global Publications. In addition, several projects aimed at organising the resources in larger units and in fewer locations is ongoing in Global Publications. As previously commented, there has been a major reorganisation process in Mynewsdesk over the past months.
As a result of the initiated measures, there was a lower operating cost in Norwegian Publications and in the SaaS segment in the second quarter this year compared with the same period last year. The underlying cost base in Global Publications is also decreasing. The work is being continued with the introduction of a number of efficiency enhancement measures across the Group to improve work operations and coordination.
“We can still achieve significant gains by becoming more digital in the way we work. Even though our users are increasingly using our products exclusively online, this isn’t sufficiently reflected in the organisation in several of our enterprises. Here, we’ve identified measures that will contribute to reducing structural costs and thus provide a basis for increased profitability in the years to come,” says Ask.
In parallel with the work to achieve increased efficiency and reduced structural costs the Group has initiated several activities aimed at creating revenue growth. Improved profitability in the longer run depend on both revenue growth and rigours control with operating costs.