Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated Interim Report for the Second Quarter and First Half Year of 2011

Teade

Tallinn, Estonia, 2011-08-01 13:10 CEST (GLOBE NEWSWIRE) --


The following report presents the consolidated financial information of
Ekspress Group, the related market developments and management decisions. The
financial indicators and ratios show the outcome of the Group's continuing
operations, i.e. they express the consolidated operating results of online
media, periodicals and printing services segments. 

Key financial indicators

                                        

         Financial indicators (EUR thousand)           Q2 2011  Q2 2010  Change%
--------------------------------------------------------------------------------
For the reporting period                                                        
------------------------------------------------------                          
Sales                                                   14 963   13 454      11%
------------------------------------------------------                          
Gross profit                                             3 388    3 368       1%
------------------------------------------------------                          
EBITDA                                                   2 024    2 179      -7%
------------------------------------------------------                          
EBITDA (excl. profit from business combinations)         2 024    2 179      -7%
------------------------------------------------------                          
Operating profit                                         1 134    1 349     -16%
------------------------------------------------------                          
Operating profit (excl. profit from business             1 134    1 349     -16%
 combinations)                                                                  
------------------------------------------------------                          
Net profit(loss) from continuing operations                394      669     -41%
------------------------------------------------------                          
Net profit/(loss) for the period                           394      669     -41%
--------------------------------------------------------------------------------



     Financial indicators (EUR thousand)         Half year     Half year  Change
                                                      2011          2010     %  
--------------------------------------------------------------------------------
For the reporting period                                                        
---------------------------------------------                                   
Sales                                               28 109        25 112     12%
---------------------------------------------                                   
Gross profit                                         6 005         5 433     11%
---------------------------------------------                                   
EBITDA                                               4 958         2 912     70%
---------------------------------------------                                   
EBITDA (excl. profit from business                   3 418         2 912     17%
 combinations)                                                                  
---------------------------------------------                                   
Operating profit                                     3 230         1 249    159%
---------------------------------------------                                   
Operating profit (excl. profit from business         1 690         1 249     35%
 combinations)                                                                  
---------------------------------------------                                   
Net profit(loss) from continuing operations          1 780         (460)    487%
---------------------------------------------                                   
Net profit/(loss) for the period                     1 780          (97)   1935%
--------------------------------------------------------------------------------



Financial ratios

Profitability ratios (%)  Q2 2011  Q2 2010
------------------------------------------
                         -----------------
Sales growth (%)              11%      -4%
-------------------------                 
Gross margin (%)              23%      25%
-------------------------                 
EBITDA margin (%)             14%      16%
-------------------------                 
Operating margin (%)           8%      10%
-------------------------                 
Net margin (%)                 3%       5%
-------------------------                 
ROA (%)                        0%       1%
-------------------------                 
ROE (%)                        1%       2%
------------------------------------------
Earnings per share EUR       0.01     0.03
------------------------------------------



Profitability ratios (%)  Half year 2011  Half year 2010
--------------------------------------------------------
                         -------------------------------
Sales growth (%)                     12%             -8%
-------------------------                               
Gross margin (%)                     21%             22%
-------------------------                               
EBITDA margin (%)                    12%             12%
-------------------------                               
Operating margin (%)                  6%              5%
-------------------------                               
Net margin (%)                        6%              0%
-------------------------                               
ROA (%)                               2%              0%
-------------------------                               
ROE (%)                               6%              0%
--------------------------------------------------------
Earnings per share EUR              0.06          (0.00)
--------------------------------------------------------



Formulas used to calculate the financial indicators:

      Sales growth (%)         (sales Q2 2011 - sales Q2 2010) / sales Q2       
                                2010*100                                        
      Gross margin (%)         gross profit/sales*100                           
      Net margin (%)           net profit/sales*100                             
      EBITDA margin (%)        EBITDA (excl. profit from business combinations) 
                                / sales*100                                     
      Operating margin (%)     operating profit (excl. profit from business     
                                combinations)/sales*100                         
      Earnings per share       net profit/average number of shares              
      ROA (%)                                  net profit/average assets *100   
      ROE (%)                                  net profit/average equity *100   
-----                                                                           
Financial position ratios (%)                   30.06.2011            31.12.2010
--------------------------------------------------------------------------------
Equity ratio (%)                                       45%                   42%
------------------------------                                                  
Liquidity ratio                                        0.7                   0.8
------------------------------                                                  
Debt to equity ratio (%)                               95%                  107%
------------------------------                                                  
Debt to capital ratio (%)                              45%                   47%
--------------------------------------------------------------------------------
                                                                                

Formulas used to calculate the financial indicators:

Equity ratio (%)         equity / (liabilities + equity)* 100                   
Liquidity ratio          current assets/current liabilities                     
Debt to equity ratio     interest bearing liabilities /equity*100               
 (%)                                                                            
Debt to capital ratio    interest-bearing borrowings-cash and bank accounts (net
 (%)                      debt)/                                                
                         (net debt + equity)*100                                



The key event for the Group in the 2nd quarter was the reorganisation process
implemented after the acquisition of Eesti Päevalehe AS which concerned both
the product as well as represented an organisational reform involving several
entities. 

In the 2nd quarter, the net profit of Ekspress Grupp totalled EUR 394 thousand.
In the first half year, the Group's net profit totalled EUR 1.78 million. The
results of the both the 2nd quarter as well as the first half year were
impacted by several extraordinary activities, with both positive and negative
effects on the financial performance. The change in goodwill that was related
to the acquisition of the shares of Eesti Päevalehe AS in the amount of EUR
1.54 million had a positive effect on the Group's net profit. However, in the
second quarter, the profit was reduced by the restructuring costs, accrual for
a potential claim related to a court case and a full ownership of the currently
unprofitable Eesti Päevalehe AS instead of the former 50% ownership as compared
to last year. 

In the 2nd quarter, the EBITDA totalled EUR 2.024 million, which is 7% lower
than a year ago. After normalising the results with extraordinary one-off
expenses in the amount of EUR 162 thousand, the normalised EBITDA was 2.186
million which is at the same level as in the same period of last year. 

The Group's EBITDA without profit from business combinations in the first half
year totalled EUR 3.418 million which was 17% higher than last year. 

The one-off expenses in the 2nd quarter were

  -- accrual for a potential claim in the amount of a EUR 60 thousand that was
     related to the action filed against AS Eesti Ajalehed and AS Delfi and that
     was lost in the court of first instance. Group entities have decided to
     appeal the judgement of the court of first instance.
  -- redundancy costs in the amount of EUR 100 thousand related to the
     reorganisation expenses at Eesti Päevalehe AS after the acquisition of
     ownership interest from the co-shareholder.
  -- extraordinary relocation expenses in the amount of EUR 32 thousand related
     to the relocation of various units of AS Eesti Ajalehed and AS Delfi in
     conjunction with the reorganisation of the entities.



Most of the expenses related to the reorganisation have been incurred and the
steps have been taken, but some expenses can still be incurred in the second
half of the year. 

It is also important to note that considering the loss of Eesti Päevalehe AS
and the gross profit of AS Printall from the printing of Eesti Päevaleht, the
Group incurred a loss of ca EUR 30 thousand from the publishing of Eesti
Päevaleht in the first half year. The Management Board expects the publishing
of Eesti Päevaleht to become profitable for the Group on the consolidated
basis. 

During the organisational reform, the editorial offices of the newspapers Eesti
Ekspress, Eesti Päevaleht and Maaleht as well as that of the portal Delfi were
relocated to premises in the former office space of Eesti Päevaleht. The
support functions and administrative offices of the entities were relocated to
the premises of Eesti Ekspress and Maaleht. During the aforementioned
organisational reform, various duplicate positions were made redundant and the
lease agreement at the former premises of AS Delfi was terminated. With the
relocation of the editorial office into the same premises, the exchange of
information between various publications and collaboration relating to the
coverage of major events have significantly improved, leading to both cost
savings as well as additional value in terms of content. 

In addition to the relocation of editorial and administrative offices, the
first step involved setting up a book publishing unit as a separate department
of AS Eesti Ajalehed, which includes all book publishing operations of the
Group's wholly-owned publishing entities and the next step of which involves
setting up a new book publishing entity in the autumn of the current year. A
financial services unit was set up at the parent company, which will provide
services to the Group's subsidiaries operating in media business. The objective
of both steps is to increase efficiency through cost optimisation and in case
of the book publisher, also to increase its competitive advantage. As a
structural reform, a separate E-media department was created at AS Eesti
Ajalehed with the goal of coordinating digital publishing operations of all
publishing entities. 

The cost effects achieved during the reorganisation will be evident in the 3rd
quarter, but the reorganisation process will likely last until the end of the
year. 

The newspaper Eesti Päevaleht underwent an important product upgrade in the 2nd
quarter. Under the management of the new editor-in-chief Vallo Toomet who had
previously been in charge of the editorial team of economic news, a renewed
Eesti Päevaleht was developed and launched in a more magazine-like format. The
first issue was printed on 4 July. The editor-in-chief of Eesti Ekspress was
replaced, the former editor-in-chief of Kuku Raadio Janek Luts became its new
editor-in-chief. 

In the 2nd quarter, the joint campaign of digital newspapers of Eesti Päevaleht
and Eesti Ekspress was launched. As the first step of the campaign, the
subscribers of the digital versions of the two newspapers were offered an
opportunity to purchase Apple iPad tablet PCs. The success of the campaign was
significantly hindered by the availability of tablet PCs, as a result of which
we decided to continue with the campaign after resolving the manufacturer's
supply issues. As the second step, the marketing of digital publications of
Eesti Päevaleht and Eesti Ekspress for regular PCs was launched. For creation
of a digital publication for PCs, AS Eesti Ajalehed has in collaboration with
its IT partner developed a software solution which enables to use the product
published in iPad also in regular desktop and laptop PCs. AS Eesti Ajalehed
plans to market the same software solution to the publishing entities in other
countries who use similar newspaper and magazine publishing platform for iPad
and the first contacts have already been made. 

With regard to the online media segment, the development at Delfi Ukraine is
worthwhile mentioning. After the product reform that was conducted at the
beginning of the year, during which Delfi Ukraine abandoned its former
conservative information portal strategy and launched a concept of more
entertaining, mostly tabloidish style social news, the readership of the portal
has started to grow steadily and reached new highs in terms of user numbers and
pageviews. The sale of advertisements has also been activating, which in the
best month of May exceeded EUR 7 thousand. The current trends have made the
Group's Management Board hopeful in terms of continuing improvement of the
financial results of Delfi Ukraine. Our objective is to become profitable on
monhtly basis by next spring. The agreement between Delfi and the international
company Deal24 offering discount deals is also worth mentioning, on the basis
of which Delfi will offer vouchers under the trademark of Delfi Deal in all
Baltic States in autumn. Delfi also launched an aggregation environment for
vouchers in other countries, where advertisements to other companies offering
vouchers are sold. 

In the 2nd quarter, as a major product development upgrade, Delfi launched the
environments for collection and displaying of entertaining pictures, videos and
jokes by users (in Estonia, under the trademark of Vimka.ee). The integration
of Delfi with the environment of Facebook is also worth mentioning, whereby
from June, it is possible to read the news posted by the company parallel with
the news comments posted by one's Facebook friends without leaving Delfi. 

With regard to organisational restructuring, AS Ekspress Grupp and AS Eesti
Meedia decided to transfer jointly published AS Linnaleht into the ownership
and under the management of the joint venture AS SL Õhtuleht. This step should
lead to modest cost savings, but also improve the marketing capability. 

In June, the joint venture AS Ajakirjade Kirjastus acquired  a 49% minority
interest in Uniservice OÜ. This should help the integration of the portal
toidumaailm.ee and the magazine Oma Maitse as well as lead to cost
optimisation. 

The sales process of AS Express Post to AS Eesti Post is still underway, the
concerned parties have submitted the required information to the Estonian
Competition Authority which is expected to make a decision during the 3rd
quarter. 

In conformity with the injunction of the Estonian Competition Authority, the
Group has also submitted a concentration application in respect of the
acquisition of the shares of Eesti Päevalehe AS. The concentration application
was not submitted earlier because AS Ekspress Grupp did not acquire control
over the other entity during a regular purchase and sales transaction, but
through various financing decisions to prevent the Group's insolvency in a
situation in which the co-shareholders did not wish to continue providing
financing. 

In the next quarter, the Group's focus will be on the completion of the
organisational reform, and development and marketing of digital versions of
published newspapers. The Group's wide product range will provide us an
excellent opportunity to offer our customers packages with miscellaneous
products, both on paper and in a digital form. We also plan to renew the offer
of tablet PCs in a package with the Group's digital products and actively
market the digital newspaper versions developed for PCs. 



Overview of the segments



Key financial data of the segments Q2 2010/2011

     (EUR thousand)                  Sales          
----------------------------------------------------
                           Q2 2011  Q2 2010  Change%
----------------------------------------------------
online-media                 2 505    2 235    12.1%
--------------------------                          
periodicals                  6 356    6 002     5.9%
--------------------------                          
printing services            6 998    5 934    17.9%
--------------------------                          
corporate functions             48       33    45.5%
--------------------------                          
intersegment eliminations    (944)    (750)   -25.9%
----------------------------------------------------
TOTAL                       14 963   13 454    11.2%
----------------------------------------------------



     (EUR thousand)                 EBITDA          
----------------------------------------------------
                           Q2 2011  Q2 2010  Change%
----------------------------------------------------
online-media                   534      467    14.3%
--------------------------                          
periodicals                    157      509   -69.2%
--------------------------                          
printing services            1 551    1 356    14.4%
--------------------------                          
corporate functions          (221)    (152)   -45.4%
--------------------------                          
intersegment eliminations        3      (1)   400.0%
----------------------------------------------------
TOTAL                        2 024    2 179    -7.1%
----------------------------------------------------



Key financial data of the segments for the first half year of 2010/2011

     (EUR thousand)                         Sales                 
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
online-media                        4 358           3 776    15.4%
--------------------------                                        
periodicals                        11 918          11 316     5.3%
--------------------------                                        
printing services                  13 467          11 485    17.3%
--------------------------                                        
corporate functions                    74              69     7.2%
--------------------------                                        
intersegment eliminations         (1 708)         (1 534)   -11.3%
------------------------------------------------------------------
TOTAL                              28 109          25 112    11.9%
------------------------------------------------------------------



     (EUR thousand)                         EBITDA                
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
online-media                          497             383    29.8%
--------------------------                                        
periodicals                           301             402   -25.1%
--------------------------                                        
printing services                   3 047           2 569    18.6%
--------------------------                                        
corporate functions                 1 105           (439)   351.7%
--------------------------                                        
intersegment eliminations               8             (3)   366.7%
------------------------------------------------------------------
TOTAL                               4 958           2 912    70.3%
------------------------------------------------------------------



EBITDA margin      Q2 2011  Q2 2010
-----------------------------------
online-media         21.3%    20.9%
------------------                 
periodicals           2.5%     8.5%
------------------                 
printing services    22.2%    22.9%
-----------------------------------



EBITDA margin      Half year 2011  Half year 2010
-------------------------------------------------
online-media                11.4%           10.1%
------------------                               
periodicals                  2.5%            3.6%
------------------                               
printing services           22.6%           22.4%
-------------------------------------------------

Online-media segment



The online media includes Delfi operations in Estonia, Latvia, Lithuania and
Ukraine. 



     (EUR thousand)                  Sales          
----------------------------------------------------
                           Q2 2011  Q2 2010  Change%
----------------------------------------------------
Delfi Estonia                  875      743    17.8%
--------------------------                          
Delfi Latvia                   533      435    22.5%
--------------------------                          
Delfi Lithuania              1 085    1 035     4.8%
--------------------------                          
Delfi Ukraine                   16       10    60.0%
--------------------------                          
other Delfi companies            0       15  -100.0%
--------------------------                          
intersegment eliminations      (4)      (3)   -33.3%
----------------------------------------------------
TOTAL                        2 505    2 235    12.1%
----------------------------------------------------



     (EUR thousand)                 EBITDA          
----------------------------------------------------
                           Q2 2011  Q2 2010  Change%
----------------------------------------------------
Delfi Estonia                   56      139   -59.7%
--------------------------                          
Delfi Latvia                    38     (30)   226.7%
--------------------------                          
Delfi Lithuania                306      385   -20.5%
--------------------------                          
Delfi Ukraine                 (57)    (141)    59.6%
--------------------------                          
other Delfi companies          191      127    50.4%
--------------------------                          
intersegment eliminations        1     (12)   108.3%
----------------------------------------------------
TOTAL                          534      467    14.3%
----------------------------------------------------



     (EUR thousand)                         Sales                 
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
Delfi Estonia                       1 576           1 328    18.7%
--------------------------                                        
Delfi Latvia                          955             788    21.2%
--------------------------                                        
Delfi Lithuania                     1 804           1 656     8.9%
--------------------------                                        
Delfi Ukraine                          23              11   109.1%
--------------------------                                        
other Delfi companies                   0              31  -100.0%
--------------------------                                        
intersegment eliminations               0            (38)   100.0%
------------------------------------------------------------------
TOTAL                               4 358           3 776    15.4%
------------------------------------------------------------------



     (EUR thousand)                         EBITDA                
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
Delfi Estonia                          56             178   -68.5%
--------------------------                                        
Delfi Latvia                           45            (82)   154.9%
--------------------------                                        
Delfi Lithuania                       270             326   -17.2%
--------------------------                                        
Delfi Ukraine                       (142)           (247)    42.5%
--------------------------                                        
other Delfi companies                 269             211    27.5%
--------------------------                                        
intersegment eliminations               0             (2)        -
------------------------------------------------------------------
TOTAL                                 497             383    29.8%
------------------------------------------------------------------



In the online media segment, the profitability increased primarily due to the
sales growth as compared to last year, whereas the key growth drivers were
Delfi Estonia and Delfi Latvia. The Latvian advertising market has clearly
turned around and Delfi has nicely benefited from this growth. The sales growth
of Delfi Lithuania was modest in the 2nd quarter as compared to last year, the
profitability of Delfi Lithuania was reduced by the tax law amendments at the
beginning of the year, leading to higher labour costs at the company. Despite
lower profitability,  Delfi Lithuania still has the highest EBITDA margin among
Delfi entities in the Baltic States. In the 2nd quarter, Delfi Estonia laid
emphasis on the integration of the local news portal Eesti Elu and the launch
of hyperlocal advertising sales, as well as the sale of advertisements via
mobile phones and video advertisements before the videos shown in the portal.
We hope to grow our advertising sales in all three areas over the following
years. 

News portals owned by the Group

Owner            Portal         Owner               Portal         
-------------------------------------------------------------------
Delfi Estonia    www.delfi.ee   Eesti Ajalehed AS   www.ekspress.ee
-------------------------------------------------------------------
                 rus.delfi.ee                       www.maaleht.ee 
-------------------------------------------------------------------
Delfi Latvia     www.delfi.lv   AS SL Õhtuleht      www.ohtuleht.ee
-------------------------------------------------------------------
                 rus.delfi.lv   Eesti Päevalehe AS  www.epl.ee     
-------------------------------------------------------------------
Delfi Lithuania  www.delfi.lt                                      
-------------------------------------------------------------------
                 www.klubas.lt                                     
-------------------------------------------------------------------
                 ru.delfi.lt                                       
-------------------------------------------------------------------
Delfi Ukraine    www.delfi.ua                                      
-------------------------------------------------------------------



In the online segment, the content production capability of Delfi is also
worthwhile mentioning, a good measure of which is its comparison with the
largest UK portals. 

In the 2nd quarter of 2011, there were no major changes in terms of the profile
and number of readers of online publications. Characteristic of the period at
the beginning of the summer, the readership in online environments is in a
downward trend, but it is still ten percentage points higher on average than in
the same period last year. 



Delfi Group is no longer the only media publication with operations in all
Baltic States. In the 2nd quarter of 2011,  Eesti Meedia AS acquired the
Latvian portal tvnet.lv and now owns portals in all Baltic States. 



Estonian online readership 2009-2011



In the 2nd quarter, the number of readers of Delfi Estonia increased by ca. 11%
as compared to the same period last year. 



Latvian online readership 2009-2011



Delfi Latvia continues to be the most visited news portal. Of the competitors,
tvnet.lv and apollo.lv have almost a third fewer visitors than Delfi.lt and
this difference has prevailed also in the 2nd quarter of 2011. 



Lithuanian online readership 2009-2011



The number of visitors of Lithuanian internet portals has declined the most in
the Baltic markets. 

In the 2nd quarter of 2011, Delfi Lithuania continued to be the most popular
Internet environment in Lithuania and despite the general decline, there were
more visitors than in the 2nd quarter of 2010. 



Ukrainian online readership 2009-2011



The number of readers of Delfi Ukraine has started to increase again and in the
2nd quarter, there were several weeks with excellent visitor numbers. However,
the number of visitors fluctuates significantly more than in the Baltic States,
which could lead to much higher readership numbers once the visitors to Delfi
sites have been turned into loyal customers. 



Periodicals segment

The periodicals segment includes publishers of newspapers and magazines, the
operations of which also include publishing of books. This segment also
includes AS Express Post, engaged in home delivery of periodicals. 



     (EUR thousand)                  Sales          
----------------------------------------------------
                           Q2 2011  Q2 2010  Change%
----------------------------------------------------
Eesti Ajalehed AS            2 031    2 002     1.4%
Eesti Päevalehe AS**         1 272    1 894   -32.8%
SL Õhtuleht AS*                864      886    -2.5%
AS Ajakirjade Kirjastus*     1 074    1 120    -4.1%
UAB Ekspress Leidyba           773      745     3.8%
AS Express Post*               607      592     2.5%
OÜ Uniservice*                   5        4    25.0%
intersegment eliminations    (270)  (1 241)    78.2%
TOTAL                        6 356    6 002     5.9%
----------------------------------------------------

*Proportionate share of joint ventures

** for the purpose of comparability, the information for both years is shown as
100%. 

     (EUR thousand)                  EBITDA          
-----------------------------------------------------
                           Q2 2011  Q2 2010   Change%
-----------------------------------------------------
Eesti Ajalehed AS              129    (139)    192.8%
--------------------------                           
Eesti Päevalehe AS**         (332)        5  -6740.0%
--------------------------                           
SL Õhtuleht AS*                 63      102    -38.2%
--------------------------                           
AS Ajakirjade Kirjastus*        78       47     66.0%
--------------------------                           
UAB Ekspress Leidyba            44       18    144.4%
--------------------------                           
AS Express Post*                78       73      6.8%
--------------------------                           
OÜ Uniservice*                   0        0         -
--------------------------                           
intersegment eliminations       97      403         -
--------------------------                           
TOTAL                          157      509    -69.1%
-----------------------------------------------------

*Proportionate share of joint ventures

** for the purpose of comparability, the information for both years is shown as
100%. 

     (EUR thousand)                         Sales                 
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
Eesti Ajalehed AS                   3 826           3 789     1.0%
Eesti Päevalehe AS**                2 720           3 329   -18.3%
SL Õhtuleht AS*                     1 701           1 734    -1.9%
AS Ajakirjade Kirjastus*            2 035           2 136    -4.7%
UAB Ekspress Leidyba                1 428           1 398     2.1%
AS Express Post*                    1 209           1 204     0.4%
OÜ Uniservice*                          8               6    33.3%
intersegment eliminations         (1 009)         (2 280)    55.7%
TOTAL                              11 918          11 316     5.3%
------------------------------------------------------------------

*Proportionate share of joint ventures

** for the purpose of comparability, the information for both years is shown as
100%. 

     (EUR thousand)                         EBITDA                
------------------------------------------------------------------
                           Half year 2011  Half year 2010  Change%
------------------------------------------------------------------
Eesti Ajalehed AS                     306             303     1.0%
--------------------------                                        
Eesti Päevalehe AS**                (461)           (373)   -23.6%
--------------------------                                        
SL Õhtuleht AS*                       113             151   -25.2%
--------------------------                                        
AS Ajakirjade Kirjastus*               60              55     9.1%
--------------------------                                        
UAB Ekspress Leidyba                    2            (72)   102.8%
--------------------------                                        
AS Express Post*                      149             155    -3.9%
--------------------------                                        
OÜ Uniservice*                         -3              -3     0.0%
--------------------------                                        
intersegment eliminations             135             186        -
--------------------------                                        
TOTAL                                 301             402   -25.0%
------------------------------------------------------------------

*Proportionate share of joint ventures

** for the purpose of comparability, the information for both years is shown as
100%. 

In the 2nd quarter, in addition to the reorganisation of Eesti Päevalehe AS,
the results of periodicals were also impacted by higher paper prices, leading
to lower profitability of periodicals. For this reason, the results of both AS
SL Õhtuleht as well as those of AS Eesti Ajalehed were below last year's level.
Magazine publishers in Estonia and Lithuania have significantly improved their
EBITDA as compared to the previous year. The license of the international
magazine Cosmopolitan obtained last spring has helped the magazine publisher in
Lithuania to significantly increase its market share and profit. In the 2nd
quarter, the results of Eesti Päevalehe AS were significantly impacted by
one-off write-down of previously published books in the amount of EUR 96
thousand. As the write-down concerned the books in the balance sheet of Eesti
Päevalehe AS as of 28.02.2011, which had been used for preparation of the
purchase price allocation of the 100% ownership interest at the beginning of
March, the purchase price allocation and goodwill were adjusted by the same
amount and write-down had no impact on EBITDA. It is important to note, that
after the disappearance of election-related advertisements and relatively weak
beginning of the quarter, the advertising sales in 2nd quarter remained at the
same level as last year, hence, sales are expected to pick up in the second
half of the year as compared to last year. 



Estonian newspaper circulation 2009-2010



The circulation numbers of Estonian daily newspapers show slight signs of
stabilisation and in the 2nd quarter, there were no significant changes in
circulation numbers. 



Estonian newspaper readership 2009-2011



In the 2nd quarter of 2011, Õhtuleht has noticeably increased its readership.
It is a considerable event in the market of newspaper because of the fact that
any publication has not managed to increase its readership two quarters
sequentially in previous years. 



Ekspress Group Lithuanian magazine readership 2010-2011



The readership of Lithuanian magazines of AS Ekspress Grupp has increased by
6,4% as compared to last period. The readership of all magazines has increased
by 7% according to data provided by TNS. Thus the readership of Ekspress
Leidyba has increased in the same rate as the readership of all magazines. 



Although the readership of Panele has decreased by 16 000, it is still the most
readed publication in its segment. Moteris and Tavo Vaikas have the biggest
increase in their readership, respectively +17 000 and +4 000. 



Printing services segment

All printing services of Ekspress Group are provided by AS Printall which is
one of the largest printing company in Estonia. Printall is able to print both
newspapers (coldset) and magazines (heatset). 



(EUR thousand)            Sales          
-----------------------------------------
                Q2 2011  Q2 2010  Change%
-----------------------------------------
AS Printall       6 998    5 934    17.9%
-----------------------------------------



(EUR thousand)           EBITDA          
-----------------------------------------
                Q2 2011  Q2 2010  Change%
-----------------------------------------
AS Printall       1 551    1 356    14.4%
-----------------------------------------



(EUR thousand)                 Sales              
--------------------------------------------------
                Half year  Half year 2010  Change%
                     2011                         
--------------------------------------------------
AS Printall        13 467          11 485    17.3%
--------------------------------------------------



(EUR thousand)                   EBITDA                
-------------------------------------------------------
                Half year 2011  Half year 2010  Change%
-------------------------------------------------------
AS Printall              3 047           2 569    18.6%
-------------------------------------------------------



In the printing services segment, the printing company Printall managed to
increase its sales by 18% and its profit by 14% as compared to last year. This
was achieved through increasing exports to Scandinavia. The share of exports in
total sales increased from 64% to 67% in a year. The company has reached its
production capacity and the company's Management Board is preparing an
investment plan for adding new production capacity. 



Geographical break-down of printing services

                       Q2 2011  Q2 2010  Change%
------------------------------------------------
                      --------------------------
Exports                    67%      63%      24%
----------------------                          
Finland                     8%       8%      11%
----------------------                          
Sweden                     19%      19%      16%
----------------------                          
Russia                     11%      13%      -2%
----------------------                          
Norway                     15%      12%      49%
----------------------                          
Denmark                     3%       4%     -10%
----------------------                          
Lithuania                   3%       2%      31%
----------------------                          
Other exports               9%       5%     105%
----------------------                          
Estonia                    33%      37%       7%
----------------------                          
Total sales               100%     100%      18%
------------------------------------------------
                      --------------------------
Incl. group sales          15%      18%       2%
----------------------                          
Incl. non-group sales      85%      82%      21%
------------------------------------------------



                       Half year 2011  Half year 2010  Change%
--------------------------------------------------------------
                      ----------------------------------------
Exports                           67%             63%      24%
----------------------                                        
Finland                            7%              8%       2%
----------------------                                        
Sweden                            19%             19%      19%
----------------------                                        
Russia                            11%             13%      -3%
----------------------                                        
Norway                            16%             12%      53%
----------------------                                        
Denmark                            3%              4%       2%
----------------------                                        
Lithuania                          3%              3%      27%
----------------------                                        
Other exports                      8%              5%      99%
----------------------                                        
Estonia                           33%             37%       5%
----------------------                                        
Total sales                      100%            100%      17%
--------------------------------------------------------------
                      ----------------------------------------
Incl. group sales                 15%             18%      -2%
----------------------                                        
Incl. non-group sales             85%             82%      21%
--------------------------------------------------------------



Consolidated statement of financial position (unaudited)

(EUR thousand)                    30.06.2011  31.12.2010
--------------------------------------------------------
                                 -----------------------
ASSETS                                                  
---------------------------------                       
Current assets                                          
---------------------------------                       
Cash and cash equivalents              1 607       2 767
---------------------------------                       
Trade and other receivables            6 522       6 943
---------------------------------                       
Inventories                            2 804       2 961
---------------------------------                       
Total                                 10 933      12 671
---------------------------------                       
Non-current assets held for sale          60          60
---------------------------------                       
Total current assets                  10 993      12 731
---------------------------------                       
Non-current assets                                      
---------------------------------                       
Term deposit                           3 021       3 009
---------------------------------                       
Trade and other receivables              153         161
---------------------------------                       
Investments in associates                  8           8
---------------------------------                       
Property, plant and equipment         17 762      19 137
---------------------------------                       
Intangible assets                     53 357      50 936
---------------------------------                       
Total non-current assets              74 301      73 251
---------------------------------                       
TOTAL ASSETS                          85 294      85 982
--------------------------------------------------------
                                 -----------------------
LIABILITIES AND EQUITY                                  
---------------------------------                       
Liabilities                                             
---------------------------------                       
Current liabilities                                     
---------------------------------                       
Borrowings                             6 252       5 233
---------------------------------                       
Trade and other payables               9 870      10 785
---------------------------------                       
Total current liabilities             16 122      16 018
---------------------------------                       
Non-current liabilities                                 
---------------------------------                       
Long-term borrowings                  30 376      33 053
---------------------------------                       
Other long-term liabilities                0           2
---------------------------------                       
Derivative instruments                   281         610
---------------------------------                       
Total non-current liabilities         30 657      33 665
---------------------------------                       
Total liabilities                     46 779      49 683
---------------------------------                       
Equity                                                  
---------------------------------                       
Share capital                         17 878      19 044
---------------------------------                       
Share premium                         14 277      14 277
---------------------------------                       
Reserves                                 375          46
---------------------------------                       
Retained earnings                      5 846       2 900
---------------------------------                       
Currency translation reserve             139          32
---------------------------------                       
Total equity                          38 515      36 299
---------------------------------                       
TOTAL LIABILITIES AND EQUITY          85 294      85 982
--------------------------------------------------------

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)                              Q2      Q2    Half year    Half year
                                          2011    2010         2011         2010
--------------------------------------------------------------------------------
                                       -----------------------------------------
Sales                                   14 963  13 454       28 109       25 112
---------------------------------------                                         
Cost of sales                           11 575  10 086       22 104       19 679
---------------------------------------                                         
Gross profit                             3 388   3 368        6 005        5 433
---------------------------------------                                         
Marketing expenses                         509     572          950        1 113
---------------------------------------                                         
Administrative expenses                  1 773   1 510        3 412        3 199
---------------------------------------                                         
Other income                               128     122        1 742          201
---------------------------------------                                         
incl. profit from business                   0       0        1 540            0
 combinations                                                                   
---------------------------------------                                         
Other expenses                             100      59          155           73
---------------------------------------                                         
Operating profit                         1 134   1 349        3 230        1 249
---------------------------------------                                         
Interest income                             10       4           20           15
---------------------------------------                                         
Interest expense                           576     694        1 135        1 318
---------------------------------------                                         
Foreign exchange gains (losses)           (31)      61        (102)           90
---------------------------------------                                         
Other finance costs                         35      36           72          101
---------------------------------------                                         
Net finance cost                         (632)   (665)      (1 289)      (1 314)
---------------------------------------                                         
Profit/(loss) from investments in         (10)    (15)         (11)         (25)
 associates                                                                     
---------------------------------------                                         
Profit (loss) before income tax            492     669        1 930         (90)
---------------------------------------                                         
Income tax expense                          98       0          150          370
---------------------------------------                                         
Profit (loss) from continuing              394     669        1 780        (460)
 operations for the year                                                        
---------------------------------------                                         
Loss from discontinued operations for        0       0            0          363
 the year                                                                       
---------------------------------------                                         
Profit (loss) for the period               394     669        1 780         (97)
---------------------------------------                                         
Other comprehensive income (expense)                                            
---------------------------------------                                         
Currency translation differences            36    (37)          107        (150)
---------------------------------------                                         
Hedging reserve change                      93       0          329            0
---------------------------------------                                         
Total other comprehensive income           129    (37)          436        (150)
 (expense) for the period                                                       
---------------------------------------                                         
Comprehensive income for the reporting     523     632        2 216        (247)
 period                                                                         
--------------------------------------------------------------------------------
Basic and diluted earnings per share      0,01    0,03         0,06       (0,00)
--------------------------------------------------------------------------------



Consolidated cash flow statement (unaudited)

(EUR thousand)                                            Half year    Half year
                                                               2011         2010
--------------------------------------------------------------------------------
                                                       -------------------------
Cash flows from operating activities from continuing                            
 operations                                                                     
-------------------------------------------------------                         
Operating profit (loss) for the period                        3 230        1 249
-------------------------------------------------------                         
Adjustments for:                                                                
-------------------------------------------------------                         
Depreciation, amortisation and impairment                     1 728        1 661
-------------------------------------------------------                         
Profit (-) loss(+) from business combinations               (1 540)            0
-------------------------------------------------------                         
Profit (loss) on sale and write-downs of property,              (7)          (3)
 plant and equipment                                                            
-------------------------------------------------------                         
Changes in working capital:                                                     
-------------------------------------------------------                         
Trade and other receivables                                   (425)      (2 525)
-------------------------------------------------------                         
Inventories                                                     157          764
-------------------------------------------------------                         
Trade and other payables                                      (991)      (1 406)
-------------------------------------------------------                         
Cash generated from operations                                2 125        (260)
-------------------------------------------------------                         
Income tax paid                                                (98)        (370)
-------------------------------------------------------                         
Interest paid                                               (1 246)      (1 386)
--------------------------------------------------------------------------------
Net cash generated from operating activities from               781      (2 016)
 continuing operations                                                          
--------------------------------------------------------------------------------
Net cash used in operating activities from                        0        (160)
 discontinued operations                                                        
--------------------------------------------------------------------------------
                                                       -------------------------
Cash flows from investing activities                                            
-------------------------------------------------------                         
Investments in subsidiaries and joint ventures                 (26)            0
-------------------------------------------------------                         
Proceeds from sale of shares in subsidiaries                      0        3 980
-------------------------------------------------------                         
Interest received                                                20           15
-------------------------------------------------------                         
Purchase of property, plant and equipment                     (400)        (288)
-------------------------------------------------------                         
Proceeds from sale of property, plant and equipment              25           18
-------------------------------------------------------                         
Loans granted                                                  (16)          (4)
-------------------------------------------------------                         
Loan repayments received                                        127          610
--------------------------------------------------------------------------------
Net cash used in investing activities from continuing         (270)        4 332
 operations                                                                     
--------------------------------------------------------------------------------
Net cash generated from investing activities from                 0            0
 discontinued operations                                                        
--------------------------------------------------------------------------------
                                                       -------------------------
Cash flows from financing activities from continuing                            
 operations                                                                     
-------------------------------------------------------                         
Issue of shares                                                   0        5 248
-------------------------------------------------------                         
Finance lease payments made                                   (611)        (678)
-------------------------------------------------------                         
Change in overdraft used                                        583      (2 504)
-------------------------------------------------------                         
Proceeds from borrowings                                         28          116
-------------------------------------------------------                         
Repayments of borrowings                                    (1 671)      (4 972)
--------------------------------------------------------------------------------
Net cash used in financing activities from continuing       (1 671)      (2 790)
 operations                                                                     
--------------------------------------------------------------------------------
Net cash used in financing activities from                        0          (5)
 discontinued operations                                                        
--------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS        (1 160)        (640)
--------------------------------------------------------------------------------
                                                       -------------------------
Cash and cash equivalents at the beginning of the             2 767        2 553
 period                                                                         
-------------------------------------------------------                         
Cash and cash equivalents at the end of the period            1 607        1 914
--------------------------------------------------------------------------------




         Additional information:
         Gunnar Kobin
         Chairman of the Management Board
         GSM: +372 5188111
         e-mail: [email protected]