Freesheet growth hurts Ma'ariv

Circulation for the year as a whole was down 5%.

Ma'ariv Holdings Ltd. (TASE: MARV), owner of Hebrew daily "Ma'ariv" today published its financial report for the fourth quarter and full year of 2009, less than a month after high-tech tycoon Zaki Rakib bought 30% of the company for $15 million.

At the time of the deal, Ofer Nimrodi, who controls Ma'ariv through Israel Land Development Company (TASE: ILDC), said, "Ma'ariv now has a future." The company's present condition, however, is not exactly great, even as the cost-cutting and restructuring measures embarked on two years ago are due to end this year.

As for the future, Ma'ariv said that the distribution of a weekend edition by freesheet "Israel Today" is liable to seriously affect the company's revenue in the future. In 2009, Ma'ariv was able to narrow its net loss by 45% to NIS 71.9 million from NIS 131.9 million in 2008, after boosting its gross profit and nearly halving its operating loss.

Ma'ariv's full-year revenue fell 8% to NIS 372.1 million from NIS 404.1 million in 2008. Its fourth quarter revenue fell 1.9% to NIS 87.2 million from NIS 88.9 million for the corresponding quarter of 2008. The company continued its streamlining and restructuring measures, which included layoffs, which helped boost its gross profit by 40.4% to NIS 80 million in 2009.

Ma'ariv said that last November's launch of "Israel Today's" weekend edition will "increase competition in the industry, and is liable to adversely affect circulation of "Ma'ariv's" weekend edition". The company reported that circulation of the weekend edition fell 15% in the fourth quarter, compared with the third quarter, although circulation of the daily edition rose 7%. Circulation for the year as a whole was down 5%.

Ma'ariv's losses caused a two-third drop in its shareholders' equity to NIS 36.5 million at the end of 2009 from NIS 106.9 million a year earlier.

Ma'ariv's share was unchanged today at NIS 4.84.

Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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