July 17, 2018 / 11:18 AM / 4 months ago

UPDATE 1-Publisher Schibsted Q2 earnings hit all-time high, shares leap

* Online classified sites boosted EBITDA in Q2

* Reduces investments and capex

* Still on lookout for M&A

* Shares jump 13.7 pct

* To conclude strategic review of lending firm Lendo in Q3 (Adds shares, analyst, detail)

By Ole Petter Skonnord

OSLO, July 17 (Reuters) - Shares in Norwegian media and classified ads group Schibsted surged on Tuesday after it reported record second quarter core earnings and continued to reduce capital investments.

Norway’s top media group, owner of several prominent classified websites such as leboncoin.fr, said key markets in France, Norway, Spain and Brazil contributed to the achievement, though margins in France were lower due to acquisitions and increased spending on marketing.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 895 million Norwegian crowns ($110.64 million)from 694 million crowns a year ago, while analysts in a Reuters poll had expected 836 million crowns.

The company’s shares were up 13.7 percent at 1006 GMT, the best performing stock of the Oslo benchmark index.

“Schibsted’s positive development continued in Q2, with an all-time high EBITDA result. At the same time, we reduced our capital investments and increased our cash flow,” CEO Rolv Erik Ryssdal said.

Revenues of the media group, which include Nordic print titles VG of Norway and Aftonbladet of Sweden, rose 6 percent to 4.6 billion crowns, slightly below forecast.

“The report confirms continuous profitability improvements after years of investments,” said Arctic Securities analyst Henriette Trondsen, who has a Buy recommendation on the stock.

LENDO

Also boosting the share price was Schibsted’s announcement of a strategic review of its personal finance firm Lendo, which could lead to a sale. The outcome of the process would be announced during the third quarter, Ryssdal said.

Trondsen at Arctic Securities estimated Lendo’s at about 6 billion crowns ($742.21 million), or about 10 percent of Schibsted’s current market value.

“A strategic update in second half 2018 could give upside to our target price. We value Lendo at NOK 6 billion but believe it could be worth NOK 6-8 billion if Schibsted finds the right acquirer,” said Trondsen, who has a target price of 310 crowns for the stock.

Schibsted kept its guidance unchanged, including 15-20 percent growth in its online classified websites, full-year investment phase losses in the range of 40-50 million euros for 2018 and a continued weak trend in print advertising.

Though Schibsted said investments were coming down, it was still on the lookout for more acquisitions for its online classified business, its key division.

“We are satisfied with the acquisitions we have done the last years, we are looking to do more of those acquisitions and we are in the financial position to do that,” Ryssdal said. ($1 = 8.0895 Norwegian crowns) (Reporting by Ole Petter Skonnord; Editing by Sunil Nair and Emelia Sithole-Matarise)

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