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Grupo Clarin: Higher Sales, Lower Net Profit

Company beset by restructuring of Multicanal SA debt and rising sales/administrative costs.


Grupo Clarin
SA, the publisher of Argentinean newspaper Clarin, as well as a major Cable TV and digital content provider,  posted a lower full year net income in its first annual results since becoming a publicly traded company — even as sales rose, and said it remains confident in its outlook. The Argentinean multimedia company, which is listed in Buenos Aires and London, posted a net profit of $209.6 million Argentinean pesos (approximately $70 million) for the full year ending Dec 31, 2007. It reported net income of $869.7 million pesos in 2006 ($290 million), mainly due to a non-recurring gain from the restructuring of the financial debt of Multicanal SA.

Grupo Clarin said its net sales during the period rose 55.9% to 4.38 billion pesos ($ 1.46 billion) from 2.81 billion, largely due to the acquisition of a 60% controlling stake in Cablevision SA and Holding Teledigital SA in September 2006.

The company said its cost of sales rose 42.5% to $2.13 million pesos ($71 million), while its selling and administrative expenses rose 48.7% to $907.7 million pesos ($302 million).

Vice chairman Jose A. Aranda said, “In 2007 we showed strong growth in sales across our segments, increased our subscriber base and continued improving our profitability.” Aranda added: “Among other major milestones for the year was the approval of our acquisition of Cablevision, which has enabled us to consolidate our position as the leading multimedia player in Argentina, and strengthened our focus on broadband, digital cable TV and communications as part of our convergence strategy. We have confidence in our ability and scale to continue generating growth in our businesses and value for our shareholders.”

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