Northern Europe focused publishing business, Mecom, has issued a profits warning as the Eurozone crisis eats into advertising revenues in the Netherlands.
The group, which publishes newspapers in Holland, says income from ads has dropped by around 17% in the second quarter compared to the same period of 2011. Mecom thinks this weakness, and pressure in Denmark on sales of its tabloid title "BT" will lead to underlying earnings for the first half coming in €14m lower than the equivalent period of 2011.
Rather worryingly, the trading update adds: "The group sees no reason for the recent declines in advertising to abate in the second half of 2012, especially given the current recession in the Dutch economy and the deepening crisis in the Eurozone, both of which have had a pronounced effect on consumer confidence."
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Mecom says it expects full year earnings before interest, tax, depreciation and amortisation (EBITDA) to now be below market expectations but within a range of between €85m and €95m.
The news has seen the stock plummet 43.7% in morning trading.
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