The PRISA Group, publisher of EL PAÍS, reached a comparable gross operating profit (EBITDA) (at a constant exchange rate and without the temporary effect of the new IFRS 15 accounting standards) of 228 million euros during the first nine months of 2018, representing an increase of 8% with respect to the same period of the previous year. The revenues of the publishing group amounted to 1,014 million, with an improvement of 2%, as reflected in the data sent to the National Securities Market Commission (CNMV).
During the first three quarters of the year, the behavior of the PRISA accounts has been characterized by a positive evolution of the operating results of the business units, the progress in the implementation of measures of the efficiency plan with a notable increase in savings and a positive cash generation of 10.2 million euros, as explained by the company.
Improvement despite the exchange effect
By business areas, the ebitda of the Education unit registered a growth of 2%, accompanied by an increase in revenues of 4%, despite being a year without news in Spain. These figures are a consequence of the behavior of the campaigns in the south and north, and despite the negative exchange rate effect, mainly from the evolution of currencies in Argentina, Brazil and Mexico and the impact of hyperinflation in Argentina.
Santillana, in addition, has settled the contest for institutional sales in Brazil with a share of 33.4%, when until now it had 16% fruit of the extraordinary performance in the product offer and in the commercial action. The registration of these sales, which amount to 150 million reais, will occur in the fourth quarter of the year. In addition, replenishments are expected over previous years in the next three years.
Regarding the media area, PRISA Radio shows an operational improvement of 35%, thanks to the good performance both in Spain (with growth in revenues of 4% and an increase in EBITDA of 58%) and in Latin America (with increase in revenues of 3%). % in local currency and a flat EBITDA, with good performance in Colombia, with a rise of 6%, and Chile, with an improvement of 10%, partially offset by the difficult situation in Argentina).
The press advances in the digital transformation
Meanwhile, the Press continues to advance in its digital development towards a growing and scalable model. In fact, in the last weeks two relevant agreements have been announced in this sense. First, EL PAÍS and Arc Publishing, the digital platform designed by The Washington Post, have joined forces to optimize the technological infrastructure of the leading newspaper in the Spanish-speaking world. Arc is a leading platform that will improve the reader experience and speed up the production and distribution of digital content. In the second place, PRISA and Vocento have reached an agreement to create a joint management platform for the sale of programmatic advertising. The objective of this market place is to achieve the aggregation of qualitative audiences for the sale of programmatic advertising, which allows advertisers to have high visibility indexes and generate efficient campaigns for users. It is a project with the vocation to integrate other editors. In fact, there are very advanced conversations with other media to be incorporated into this market place.
Media Capital, on the other hand, improves its operating result by 6%, with a 2% increase in advertising revenues and maintaining its leadership in the Portuguese market.
Advance in the efficiency plan
Apart from the good individual behavior of the business units, it is worth highlighting the result of the global efficiency policy. The plan generates savings in expenses of 33.8 million in the first nine months of the year (19.8 million in the first half), with an impact on the EBITDA of 26.9 million euros (15.7 in the first half) .
In contrast, the exchange rate has had a negative impact on revenues of 63.3 million euros and 15.7 million in EBITDA. Additionally, the impact of the hyperinflationary situation in Argentina has been recorded in the accounts of this period, which has resulted in a negative impact on revenues of 14.8 million euros and 6.1 million euros in reported accounts. the ebitda.
Net debt as of September 2018 stood at 988 million, compared to 1,422 million in December last year. In the first nine months of the year, there was also a positive cash generation of 10.2 million euros, against a negative cash balance of 69 million euros that occurred in the same period of the previous year.
Positive cash generation
With all this, the Group's gross profit between January and September of 2018 amounts to 57.3 million, when in the same period of the previous year it was 7.6 million. The net result shows a negative balance of three million, compared to 55.6 million red numbers in the comparable period.
In addition, after the capital increase and the agreement with creditor banks to refinance their debt, PRISA has just taken a new step forward in financial transparency, with the obtaining of the Group's credit rating by two international agencies of recognized prestige. . These agencies assign a rating of "B" with a stable outlook (Fitch) and "B-" with a stable outlook (S & P), which are in line with those obtained by other companies in the industry. These ratings are an acknowledgment of the significant improvement in the Group's financial situation, as well as the strength of its business.