German publisher Axel Springer, set to take over broadcaster ProSiebenSat.1 Media, raised second-quarter core earnings by 11 per cent, boosted by new titles and its Bild newspaper.
Earnings before interest, tax and amortisation (EBITA) rose to €92.3 million, as sales grew 2.3 per cent to €614.8 million in the quarter to June, Springer said in a statement today.
The group, whose flagship Bild is read by 12 million Germans every day, raised its net liquidity position to €239 million in the quarter as it is poised to spend €2.5 billion to buy control of ProSieben once the deal is approved by regulators. Springer this month agreed to buy a ProSieben stake from a group of investors led by US billionaire Haim Saban to form the country's second-biggest media conglomerate and take on media behemoth Bertelsmann in its home market.
It is offering to buy all outstanding preference shares in ProSieben for €14.11 per share and will swap all shares not tendered into newly created Springer preference stock.
The deal is still subject to approval by the German cartel office - which may demand that Springer sell a stake in a printing joint venture with Bertelsmann - and by media regulators.
Springer will raise around €3 billion in debt to fund the acquisition and to refinance ProSieben's debt, bringing the groups' combined net debt to almost five times last year's core earnings. In the second quarter, Springer bucked a trend of falling revenue from newspaper sales and advertising.
New Springer titles, including best-selling Polish newspaper Fakt and television guide TV Digital, have increased sales and reduced startup costs, helping earnings. Money-spinner Bild boosted sales as the main advertising outlet for discounters. Springer's newspaper business contributed nearly 90 per cent of the group's EBITA in the quarter.
Overall magazine revenue fell in the quarter, hit by weaker demand for women's, sports and computer magazines, but Springer's TV Digital - which focuses on pay-TV programmes - offset some of the revenue drop.