Advertising reveues tumble at European publisher Mecom

European newspaper publisher Mecom - which is listed in the UK and owns titles in the Netherlands, Denmark, Norway and Poland - has reported a 12 per cent drop in advertising revenue year-on-year in the first quarter of 2012.

Poland was the worst performing country, with a 19 per cent advertising drop over the period - and the group said it expected this trend to continue.

Non-advertising revenues were broadly flat year-on-year - and these sources of revenue other than advertising now make up 59 per cent of the group's total income.

Operating costs fell by five per cent year-on-year in the first quarter - and the group said it remained committed to delivering €70 million in cost reductions by 2014.

Mecom recently launched iPad apps for all of its Dutch titles this month, in a move that aims to "enhance loyalty and retention" of subscribers.

Group chief executive Tom Toumazis said in today's trading update: "Our first quarter has delivered stable non-advertising revenues due to the strength of our 1.2 million subscriber base.

"The advertising environment, however, has deteriorated further and, although the impact is being partly mitigated by cost reductions as we successfully implement our restructuring programme, overall revenues have decreased.

"Our new strategy is on track and is strengthening Mecom's position within a challenging media environment. We have now launched apps for our top ten titles which are proving popular with our readers.

"We have also announced our intention to collaborate further on distribution with three other Dutch publishers to generate further cost savings.

"For the year as a whole, we do not anticipate an improvement in the advertising environment but we will benefit from stable non-advertising revenues, further cost reductions and an earnings contribution from Edda in the first half of 2012."

Edda Media is Mecom's Norwegian publishing division, which it is currently seeking to sell to A-Pressen, subject to approval by competition authorities.

Mecom hopes the deal will be completed by the end of July.

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