Friday, February 08, 2008

Metro has good news, bad news

Metro International is back in the black with a $5.1 million profit in the fourth quarter. While that is a 56 percent decrease from the same quarter in 2006, the chain's sales were up 12 percent -- from $124 million to $139 million. (Click on graphic for details.)

That's the good news. The bad news is that company suffered a $28 million loss in 2007 compared to a net profit of $13 million in 2006. And that's probably the headline you'll see in the financial media.

But with the gains in the fourth quarter — its first quarter with former Danish TV executive Per Mikael Jensen as chief executive — Metro is turning a corner.

Metro did better in France, Italy, Chile, Hong Kong and Canada. The company's problems are in Spain and the U.S.

Metro has put its three U.S. papers — Boston, New York and Philadelphia — up for sale, and not a minute too soon. A statement from Metro says its fourth quarter in the U.S. was "very disappointing" following good revenue growth in October.

In the fourth quarter (October-December), Metro Boston had $2.3 million in sales, Philadelphia $2.4 million and New York $3.5 million. During the same period, the three papers had a combined loss of $2.8 million. For the year, Metro had combined sales of $34 million and a loss of $12 million in the U.S.

To cut costs, Metro is combining operations at the three papers, which previously were somewhat independent of one another. Those three papers remain up for sale, but Jensen wouldn't comment on how the bidding is going. We have reported previously that billionaire oilman Phil Anschutz, owner of the struggling Examiner chain, isn't bidding, but BostonNOW owner 365 Media (Iceland's phone company) was interested.

While Metro has not made a profit in the U.S., Jensen said his chain is doing better in Canada because it has gone coast-to-coast and has become a factor in the national advertising market. He admitted that the same could not be said for Metro in the U.S., which has a presence in only three markets.

But Metro had some eyepopping news to report:

"Our joint venture operations have delivered an additional $0.3m EBIT (Earnigns before interest and taxes) in Q4 including a quarterly profit in Brazil after only eight months of operation. The improvement arises from the operations in Mexico, Korea and Canada which all continue to deliver improving profits. Canada's sales have increased 53 percent in Q407 versus 2006 and it is now the second largest Metro operation in terms of revenue."