INDO SEES STRONG ADVERTISING GROWTH ACROSS ALL MARKETS - Independent News and Media's results for 2007 show that revenues for the year were better than expectations, rising 2.3% to €1.67 billion. Operating profit was up 6% at €349m. It also reported an 8% rise in earnings and predicted another year of earnings growth in 2008 despite economic uncertainty. The group, which publishes the Irish Independent and titles in South Africa, Australia and New Zealand, said 2007 underlying earnings per share were up 8% at 18.8 cents, slightly lower than expectations. Its dividend for the year is 10% higher at 13.7 cent.
INM's CEO for Ireland, Vincent Crowley, says that the main highlights for the group last year included strong advertising growth in all of its markets, good circulation revenue growth in its markets and strong growth in margins. He says this is evidence of good cost control across all the group's areas. He says this was achieved in 'a turbulent enough' second half.
However, the group did experience some currency difficulties with the South African rand especially coming under pressure. Mr Crowley says the group has hedged most of its exposure for 2008 at quite a favourable rate, and therefore do not expect to have any rand hit this year. He says that sterling is a bit of mixed bag for the company as it purchases some things in sterling, which, in an operating sense, is of some benefit.
Mr Crowley says the group's outlook for 2008 is quite positive, in the current circumstances. He says the company expects its earnings to grow, and in the current climate, is in contrast to a lot of other media companies. Profits so far this year already are ahead, he states.
***
ICELANDIC MOVES ON RATES TO BOOST MARKET - Many fear that Iceland is going to become the first country to fall victim to the global financial crisis. This week, in an attempt to strengthen its weakening currency, its central bank increased interest rates by 1.25 percentage points to 15%. Iceland's krona fell by 22% against the euro this year, but Tuesday's interest rates move saw some recovery.
Iceland expert Richard Portes is president of the Centre for Economic Policy Research in London. He says that the banks have very strong fundamentals and that Iceland has the fifth highest GDP per capita in the OECD. He says the country should not be a 'playground' for the speculators. He says that a lot of what has happened has been fuelled by rumours and speculative plays in the Icelandic market. He says he would not be at all surprised if the same malicious trading was found there as is being investigated here and in the UK. Mr Portes says the weakness on Iceland's stock exchange is down to the weakness of its currency and that is the main reason why the central bank raised interest rates earlier this week.
***
MORNING BRIEFS - Smurfit Kappa has announced the closure of one of its recycled containerboard mills in Northern Spain. It says the closure is part of the company's ongoing efforts to reduce recycling capacity.
*** Ryanair is looking at ways to save €400m as the price of oil stays over $100 a barrel. It is going to keep putting up the price of checking luggage in, and is also reviewing all of its main costs, like airports, staffing levels and fuel. The no-frills ethos is set to extend to the boardroom, as the airline is also freezing 36 managers' pay, including that of CEO Michael O'Leary.
*** Ratings agency S&P has issued a report on Irish banks. It says the outlook for Irish banks is now mixed after what it described as a 'stellar' performance in 2007. It says that difficult funding conditions had driven up inter-bank rates and would contribute to a slowdown in lending in Ireland and Britain. And Standard and Poor's sees no credit problems with any of the Irish banks.
*** The German investment bank with a presence in the IFSC, Hypo Real Estate, has warned this morning that it is not possible to rule missing its profit goal for the year in the face of 'further serious turmoil' in the international financial markets.
*** European Central Bank chief Jean Claude Trichet yesterday urged countries to remember the first global oil crisis and not give in to the temptation to raise wages and salaries. Trichet said the worst is not behind us in relation to global markets turmoil.
*** On currency markets this morning, the euro is trading at $1.5811 cents and 78.79 pence sterling.
