Ma'ariv Holdings Ltd. (TASE: MARV), controlled by Israel Land Development Co. (TASE: ILDC) ended the third quarter of 2008 with a loss of NIS 23.4 million and negative cash flow of NIS 11.8 million. This follows a loss of NIS 78.4 million in 2007.
The company has warned that the continuation of operations on the current basis, and its ability to meet its commitments, is dependent on obtaining suitable sources of finance, receiving credit from the banks and a substantial improvement in business results.
Over the past year Ma'ariv has implemented a number of measures in order to survive in Israel's competitive media market, which it seems have not been especially successful. Firing employees and other cuts have not influenced the newspaper's circulation - revenue fell by 14.4% in the third quarter of 2008 compared with the corresponding last year to NIS 107.6 million.
The recession brings a reduction in advertizing budgets generally and in newspapers in particular, and the company anticipates that in the initial stage companies in difficulties will cut their advertizing and marketing expenses, and such a policy will have critical repercussions for the company. Additional factors, which will negatively influence the Ma'ariv newspaper are the strengthening of the Internet and competition from the daily freesheet "Israel Today," which according to Ma'ariv has consolidated its status as a legitimate newspaper.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2008
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