Axel Springer AG, Europe's biggest newspaper publisher, said profit last year climbed 26% as economic growth lifted advertising sales and new publications proved popular.
Axel Springer AG's net income rose to €291 million ($382 million) from €231 million a year earlier, the Berlin-based company said in a statement yesterday, citing preliminary figures. Sales were unchanged at €2.38 billion after Springer in 2005 merged a printing unit with that of rival Bertelsmann AG. A failed attempt to push into television broadcasting last year prompted Springer to focus instead on expanding its print operations, with new publications in Russia and other markets in eastern Europe.
Springer, named after its founder and controlled by his family, publishes the Bild newspaper, Germany's biggest tabloid that draws more than 12 million readers every day. Shares of Springer rose €2.75, or 2%, to €142.5 in Frankfurt, valuing the company at €4.8 billion. The stock climbed as much as 8.1% earlier yesterday.
The shares have risen 24% in the last six months, compared with a 15% gain of the 29-member Bloomberg Europe Media Index. The publisher also benefited from higher advertising sales as a rebounding German economy allowed companies to spend more. Europe's largest economy grew 2.7% in 2006, the most in six years, and may expand 2.3% this year, the DIHK chamber of industry and trade forecast on February 14.
Combined circulation and advertising revenue, excluding the impact of lost revenue through the gravure printing deal with Bertelsmann, rose 1.2% to €2.19 billion, Springer said yesterday. The „significant” earnings increase last year prompted Springer to more than double the dividend payout to €3.50, €1.70, the company said.
Springer is focusing on newspapers, magazines and Internet publications after regulators in January quashed an agreement to acquire ProSiebenSat.1, Germany's biggest private broadcaster, for as much as €4.2 billion. With ProSiebenSat.1, Springer had planned to create a second German media company with print and TV operations to challenge Bertelsmann in Germany's €20 billion advertising market. (Bloomberg)