The Swiss media company, PubliGroupe, has reported a plunge in first half profit to SFr8 million ($4.74 million), a decline of 93 per cent over the comparable period last year. It blamed the result on problems at its online and United States advertising units.
Shares in the company closed down more than 14 per cent at the Zurich stock exchange on Tuesday to SFr300 from SFr350 at Monday's close.
PubliGroupe, formerly Publicitas, warned in a statement on Tuesday that the second half would also be "difficult", with growth not expected to resume until the end of the year.
The Lausanne-based concern said profit for the year as a whole was expected to be about SFr25 million. However, this did not take into account the risk incurred on the 103,710 of their own shares figuring in the PubliGroupe balance sheet at an average purchase price of SFr561.
On August 28, the price of SFr426 would therefore imply a value correction of SFr14 million which would penalise the net financial income to that extent.
Operating income declined
The company said the sharp downturn could be attributed both to lower operating income, which had declined to SFr10 million from SFr37 during the comparable period in 2000, and to the decline in ordinary financial income which fell to SFr7 million from SFr15 million.
It said the results were "seriously penalised" by the difficult economic situation on the US market and the collapse of the online advertising sector, two factors which worsened in the second quarter,
This had hit the PubliOnline division and the US advertising group Panoramic Communications that it acquired at the end of last year. "Some of its member companies turned out to be in a more fragile situation than had been supposed," the company commented.
The PubliOnline division lost SFr24 million in the first half and this should widen to SFr50 for the year as a whole, the statement added.
The company said that it had taken "appropriate measures" to eliminate the sources of losses in 2002.
swissinfo with agencies