Sanoma Plummets on ‘Dire’ Sales, Profit Outlook: Helsinki Mover
Sanoma Oyj (SAA1V), the Finnish media company, fell the most in more than 10 years in Helsinki trading after saying an advertising slump will hurt 2013 sales.
Sanoma shares retreated as much as 11.4 percent, the most since July 2002, and dropped 11.2 percent to 7.47 euros at 1:00 p.m. in the Finnish capital. The volume of shares traded exceeded the average daily trading over three months by about 90 percent.
“The profit warning is extremely dire,” FIM Bank Oyj analysts said in a note today. “We’re worried that profitability may be collapsing.”
Net sales will fall by 2 percent to 4 percent this year and operating profit excluding one-time items will be about 180 million euros ($233 million) to 205 million euros, Sanoma said today. It had previously said net sales and operating profit development would be “a continuation” of 2012, when revenue dropped 0.1 percent to 2.4 billion euros and profit rose 3.6 percent to 232 million euros.
“The profitability level is extremely far from the target and last year’s falling curve seems to be extending,” FIM said. “We had expected profitability to improve in the Netherlands this year, but it looks like problems haven’t been resolved and this combined with the waning advertising market doesn’t bode well for Sanoma.”
Sanoma will also book an impairment charge of 34.8 million euros on its Dutch assets.
“Advertising markets in Sanoma’s main operating countries are more depressed than expected,” the Helsinki-based company said. “Price increases, bundles and digital offerings aren’t able to fully offset the decline in circulation sales.”
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at email@example.com
To contact the editor responsible for this story: Tasneem Brogger at firstname.lastname@example.org