Metro annual 2007 report

After the first profits in 2006, Metro International was in the red again with a net loss of $27.6 million. Chairman Dennis Malamatinas attributed this in the annual report (download from Metro.lu) to “extremely tough trading conditions in the newspaper industry and poorly performing businesses in some parts of world.” The US mortgage crisis, Swedish tax problems, investment in online and restructuring headquarters meant extra costs and less revenues.

According to CEO Per Mikael Jensen Metro was “in the eye of the storm’ in 2007, with “poorly executed strategies in some of our major markets”. Performing ‘very strong’ according to Jensen were the Netherlands, Hong Kong, Canada, Denmark, Sweden (in Q4 2007), Chile, Russia, South Korea, and Portugal. Also France, Italy, Hungary and Greece were singled out as performing well. US, Spain, and the Czech Republic were not on the list while Sweden performed particularly poor in the first quarter according to ‘poor discount control’. Home-delivered free real estate weekly Bostad in Stockholm was closed, the Czech Republic was sold while there were cost cuts in the US.

The dispute with the Swedish tax office lead Metro to an extra provision of $10m. The dispute centers around the question whether Metro is a ‘newspaper’ or not. From 2001 to 2005 Metro had to pay 11% taxes on advertising sales – paid papers paid 4%. In 2006 the Metro rate was 8% while paid papers paid 3%. From 2007 on all papers pay 3% which lead indeed to the impression that there was unequal treatment in the earlier years.

Ten out of 14 majority owned operations were profitable. Italy (launched 2000) and Portugal (launched 2005) for the first time made profits. US, Spain, Czech Republic lost money. For Sweden a $2m loss in 2007 was reported (profit of $17m in 2006) while loses in the USA were almost double with $12.2m ($6.7m in 2006). Southern Europe losses were minimal ($272,000) but can be attributed mainly to Spain, indicating that either the loss in Spain is impressive or the profits in the other markets are still marginal.

Of the joint ventures Canada performed very well, it is now the second largest operation after Sweden. The Brazilian edition (launched 2007) is already profitable; Mexico (launched in 2006) was profitable in Q4 2007. Also the Russian St. Peterburg edition is making profits.

Almost 60% of the total costs ($480m) consists of production costs ($280m). The costs for sales are $108m while the administrative expenses were $88m. The majority (57%) of the production cost for Metro concerns paper and print, distribution amounts for 29% while the editoral costs are 14% of the production costs (8% of total costs).

Metro published in 2007 specials on the Cannes film festival, a Valentine Days issue, the green environmental Metro, a pink ribbon Breast Awareness issue and a ‘happy’ Metro in January. It covered the American elections together with CNN.

3 Responses to “Metro annual 2007 report”

  1. Newspaper Innovation » Blog Archive » Swedish newspaper tax reform planned Says:

    [...] dispute. Metro, for instance, has had a long fight with the Swedish tax office on this issue (see previous post). [...]

  2. sugge Says:

    i need the annual report of metro news paper because im doing a project on operating logistics and management ( london school of economics )

  3. Piet Bakker Says:

    It is on the Metro.lu website for download.