"We have reason to be pleased," said company president Wanda Rapaczyńska. Profits were mainly fueled by the group's well-established daily, Gazeta Wyborcza. Magazine, radio, outdoor and internet projects achieved their operational targets, but not gains.
The newspaper's average copy sales in 2004 were up 4.5 percent, and sales from advertising surged by 10 percent. It also managed to hang on to its 43-percent share of the newspaper advertising market, despite tough competition from newcomer Fakt.
Owned by pugilistic German publisher Axel Springer, Fakt beat out Gazeta in both readership (22.6 to 19.2 percent respectively) and daily circulation (525,500 to 436,000), but has so far only captured a measly three percent of the advertising market. Some, however, expect that to change, making life much tougher this year for Gazeta.
"[Fakt's] position is really strong," says Tomasz Ramza, chief of buying and negotiations at media house MPG. "If somebody wants to invest in print advertising, they'll go to them."
In preparation for the dogfight ahead, Agora slashed its number of employees by nearly 500, or 12.8 percent, over the past year, which was the main factor influencing the higher numbers.
"The increase in the revenue level resulted in higher net profits because labor costs were relatively stable, or even decreased," says Deutsche Bank Securities' media analyst, Włodzimierz Giller.
He expects the ad market to increase another 10 percent this year, leading to further gains. "Agora's net profit could double in 2005," he predicts.
Now, the company is hunting targets for acquisition, both at home and in the Central European region-perhaps finally gaining a presence in the lucrative TV market. However, that may prove a tough nut to crack.
"There are not many targets to be purchased," notes Giller. "Media owners are quite demanding."
Agora is also planning a dividend payout of zł.0.5 per share annualy, as well as a share buyback program.
Andrew Kureth
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