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November 9, 2018 / 07:14

The financial results of the Agora Group in 3Q 2018

Excellent results of Helios cinema network and higher inflows of Internet and Outdoor segments ensured the Agora Group an increase in revenues in 3Q 2018. The Group also improved its operating results and implemented further development projects. They included strenghtening the Group’s market position in the prospective sector of B2B services and launching operations in food market.

The total revenues of the Agora Group in 3Q 2018 amounted to PLN 258.8 million and increased by 2.9% yoy. This was mainly due to higher income from cinema operations and higher advertising sales.

In line with the growth of cinema attendance in Poland, Helios cinema network recorded an increase in ticket sales – up by 15.5% yoy to PLN 55.0 million¹, and in concession sales – up by 12.8% yoy to PLN 21.1 million. In the discussed period – according to Boxoffice – over 3.0 million tickets were purchased in Helios cinemas, which stands for nearly 18.0% growth yoy². Revenue from the Group’s advertising sales increased by 2.3% yoy and accounted for PLN 122.3 million. This growth was primarily driven by higher income of Internet segment – mainly due to higher inflows of Yieldbird, offering advertising services in the programmatic model, and Outdoor segment – due to the systematic development of Citylight Premium panels and campaigns carried out in public means of transport. Advertising revenues noted in the Press, Radio and Movies and Books segments decreased, i.a. under pressure of market trends.

The other categories of Agora Group's inflows were lower yoy. The most significant drop was observed in copy sales revenues, mostly in revenues from copy sales of printed editions in the Press segment influenced by persistent unfavorable market situation and reduction of the Group's press portfolio. Lower yoy income from the sale of printing services was associated with a decreased volume of orders, primarily in the coldset technology, while lower inflows from other sales – with a decline in revenue from other sales in Internet segment, as well as in cinemas and from the film business of the Group.

The Group's net operating costs in 3Q 2018 increased slightly (by 0.9% yoy) to PLN 262.9 million. The growth was related to development activities in Movies and Books, Outdoor and Internet segments, while Print, Press and Radio segments noted lower yoy operating expenses.

Expenses on external services, which raised by 6.1% yoy to PLN 102.4 million, were the largest cost item. This was mainly an effect of their increase in the following segments: Movies and Books – due to a very high cinema attendance in 3Q 2018, Internet – related mainly to the development of Yieldbird, and Outdoor – due to the increased number of campaigns carried out and expansion in the digital area. The yoy increase in the cost of materials and energy consumed, as well as the value of goods and materials sold resulted mainly from an increase in newsprint prices.

On the other hand, the expenses on depreciation and amortization decreased, mainly due to impairment of assets in 4Q 2017³, as well as Group’s promotion and marketing costs, reduced considerably in Movies and Books, Internet and Outdoor segments. Lower yoy were also staff costs, significantly limited in Press, as well as in Internet, Print and Radio segments.

Thanks to the growth of revenues noted in 3Q 2018 the Agora Group’s EBITDA increased by 9.7% yoy to PLN 17.0 million and the Group limited the loss on the EBIT level to PLN 4.1 million. The net loss amounted to PLN 2.8 million, while net loss attributable to equity holders to PLN 3.7 million.

Fullfiling its business strategy for 2018-2022, the Agora Group implements further development projects. In September this year Agora acquired a minority stake in ROI Hunter, thus strengthening its presence in the B2B services sector, while its globally successful company Yieldbird is completing work on a new product targeted at medium and large customers. Helios cinema network is planning the next openings of multiplexes, including those with the premium offer in the form of Helios Dream screening rooms – e.g. in the cinema located in Blue City in Warsaw. Foodio Concepts, a subsidiary of Helios, is on the verge of starting operations on the food market – the first facilities under the Papa Diego brand will soon be opened in Gdańsk and Katowice, and the Foodio Concepts team is finalizing negotiations of further locations.

Data source: consolidated financial statements according to IFRS, 3Q2018.

Footnotes:

¹In the 3Q2018, over 2.8 million tickets were purchased in Helios cinemas, i.e. over 9.0% more than in the previous year. The data on ticket sales in the cinemas comprising Helios group come from the accounting data of Helios reported in accordance with full calendar periods.

²The sale of tickets in Helios cinemas in the same period as the one reported by Boxoffice reached 3.0 million and the dynamics of this sale amounted to nearly 18.0%.Ticket sales data are estimates of the Helios group according to Boxoffice.pl data that is based on data provided from film distributors. 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.

³Refers to write-offs of non-current assets made in the 4Q 2017 in the Print, as well as Film and Book segments.

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The financial results of the Agora Group in 3Q 2018

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