Press / 2001

Thursday 31 May 2001

Press release: First quarter 2001

Cologne, May 31, 2001: In the first quarter of 2001 BRAINPOOL TV AG increased sales by 22.7 percent to DM 28.1 million (Q1/2000: DM 22.9 million). In the first three months EBIT declined from DM 3.6 million to minus DM 6.7 million. Accordingly, the net result was a loss of DM 3.9 million, after earnings of DM 2.2 million on a year on year basis. The reason for the decline in the result is the high expenditure for the print business started in January.

Mainly due to the general slump in the advertising market, the magazine "TV total" did not meet earnings expectations. The general restraint of the advertising industry, which is making its presence felt in all media, hits new publications particularly hard, due to the fact that no annual performance and media data are available. These are gathered on a yearly basis and are used by the industry as a basis for making decisions for advertising expenditure. BRAINPOOL was involved in very promising negotiations with large publishing houses on the sale of the print business. Due to anti-trust problems, which occurred recently this week, it was not possible to pursue the concrete purchase offer of a publishing house. The publishing house made initial enquires to the monopolies and mergers commission. A negative response was received due to its dominating market position with TV listings magazines. Continuation of the magazine for a long period until reaching a final decision was too great a financial risk for BRAINPOOL. To limit losses at this early stage, BRAINPOOL has decided to terminate the project immediately. The negative impact on earnings is expected to be some DM 28 million; this includes development, start-up and winding up costs which have not yet been exactly quantified. These losses will be incurred predominantly in the 2nd quarter.

In the first quarter all other business areas developed in line with planning. Revenues from broadcasting licenses, the most important business area, increased by 48 percent to DM 20.8 million, in line with expectations. Highlights of the first quarter were the extension of the format "TV total" from one to four episodes a week and the start of the series "Der Doc – Schönheit ist machbar"" [The Doc - Beauty can be Made] with Ingolf Lück. In May, the second series of "ANKE – Die Comedy-Serie" started.

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