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November 8, 2019 / 07:10
A significant increase in revenues in all major business lines provided the Agora Group with improved operating results at the end of the 3Q2019. Radio, the AMS group and the Helios cinema network achieved excellent results. The dynamics of ticket sales in Helios cinemas has once again visibly outperformed the market. Advertising and copy sales revenues of the Group also increased due to higher inflows of the Agora Publishing House and from the sales of “Gazeta Wyborcza”.
The results of the Agora Group in 3Q2019 were significantly impacted by the entry into force of IFRS 16. In order to maintain the comparability of data, this press release presents data without the impact of IFRS 16. More information on the effects of implementing IFRS by the Agora Group can be found in the financial statements for 3Q2019.
- It was a great quarter for the Agora Group. All of our largest businesses generated higher revenues and reported better operating results. The success of the subscription model of "Gazeta Wyborcza" is confirmed both in a record number of over 200 thousand digital subscriptions, as well as systematically growing revenues from the sale of Wyborcza.pl content. The past quarter was also a time of investment in Online Technologies HR and intensive preparations for the potentially largest transaction on the media market in the history of the Agora Group, i.e. the purchase of all the shares in Eurozet - says Bartosz Hojka, President of the Management Board of Agora.
Due to the increase in revenues recorded in most business lines in 3Q2019, the Agora Group significantly improved its operating results – profit at EBITDA level grew to PLN 27.8 million, and at EBIT level to PLN 6.2 million, while the net profit stood at PLN 7.5 million*.
In the 3Q2019, the Agora Group's total revenue amounted to PLN 293.3 million - growing by over 13% yoy. This increase was ensured by growth of all income categories, except for inflows from printing services, and in particular by higher revenues from cinema operations. Income from cinema tickets sold grew to PLN 63.0 million. In 3Q2019 in total, over 3.4 million tickets were purchased in Helios cinemas (up by over 20% yoy)**. The dynamics of the increase in the number of tickets sold in Helios cinemas was once again significantly higher than on the market (according to Boxoffice.pl data, 12.6% in Helios vs 4.5% on the market). At the same time, revenues from cinema concession sales grew by over 35%, and advertising inflows of Helios network were also higher.
Advertising revenues of Agora Group increased considerably - by almost 10% to PLN 134.1 million. Although they grew in most segments, their largest increase was recorded by: Internet - mainly due to higher income of Yieldbird; Outdoor Advertising – mostly owing to advertising campaigns carried out on Premium Citylight and Digital panels; and Radio.
The increase in copy sales revenues was associated with higher inflows of the Agora Publishing House and from the copy sales of Gazeta Wyborcza - both the paper edition and Wyborcza.pl content subscriptions. At the end of September 2019, Gazeta Wyborcza had over 200,000 active digital subscriptions, which places the daily at the forefront of press titles in the world.
Revenues from the Group's film business also increased significantly, resulting from a greater number of new titles in cinema distribution. In the 3Q2019, NEXT FILM introduced to the Polish cinemas the crime comedy Na bank się uda and the historical drama Piłsudski. At the same time, Agora's higher income from other sales was provided mainly by food services activities.
Inflows from the printing services were the only category of revenues that was lower yoy. Their decrease was influenced by a drop in the volume of orders and closing of two printing plants. Importantly, from 3Q2019, the Agora Group's printing activity, which includes one printing plant located in Warsaw, is a part of the Press segment.
In the 3Q2019, the net operating costs of the Agora Group grew by a little over 9% to PLN 287.1 million. This was a result of their increase in the Movies and Books, Internet, Radio and Outdoor segments related to intensive development of each business. On the other hand, operating costs were lower in the Press segment, which also included the restructured printing activity.
The largest impact on the increase in the Group's expenses had higher by almost 22% costs of external services in the amount of PLN 124.6 million. The Movies and Books, Internet and Radio segments contributed the most to the growth in this cost item, but their outlays were offset by higher revenues.
The growing Movies and Books segment was responsible in particular for the higher staff costs. In other operating segments there was a reduction in this expenditure category, mainly due to lower full-time employment.
Depreciation costs also increased, primarily in the Internet and Movies and Books segments, as well as expenses on marketing and promotion, which grew in most business areas except for internet activity. On the other hand, the costs of materials and energy and the value of goods and materials sold dropped, mainly due to the reduction of Agora's printing services activity.
The Agora Group continues implementation of its development strategy. In the 3Q2019, the Helios cinema network expanded by another multiplex - a four-screen facility in Pabianice, At the same time, it also enriches its offer in existing cinemas with premium screening rooms Helios Dream - in the last quarter they were opened in multiplexes in Radom and Rzeszów.
AMS - thanks to the purchase of shares in Move TV platform - took another step in building digital portfolio of panels and services, as well as strengthening its position in the prospective DOOH area.
The digital strategy departments of Gazeta Wyborcza and Radio TOK FM are further developing their subscription offer, while working on increasing revenues in this area. In September 2019, the number of subscriptions to Wyborcza.pl content already exceeded 200,000.
Agora also keeps developing new projects in the Internet area - in September it became the majority shareholder of the company Online Technologies HR Sp. z o.o., offering innovative IT solution dedicated to online recruitment. This company, for another year in a row, was listes among 50 fastest-growing technology companies from Central Europe according to Deloitte.
Following the announcement of the intention to buy the remaining shares in Eurozet Sp. z o.o., Agora submitted on 28 October 2019, application to the President of UOKiK for consent to this transaction.
Data source: consolidated financial statements according to IFRS, 3Q2019.
* The Group's EBITDA presented in accordance with IFRS 16 reached PLN 47.4 million in 3Q2019, and at the EBIT level PLN 8.3 million. The net loss amounted to PLN 3.1 million, while the net loss attributable to equity holders of the parent company stood at PLN 2.9 million. Exchange rate differences resulting from the application of IFRS 16 had a negative impact on the net result of the Group presented this way.
** Attendance data at Helios cinemas is reported in accordance with calendar periods, while market attendance data - according to Boxoffice.pl. In the latter approach, the sale of cinema tickets is reported in periods that are not identical to the calendar month, quarter or year. The number of tickets sold in a given period is measured from the first Friday of a given month, quarter or year to the first Thursday in the following month, quarter or reporting year.