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Springer posts loss after mail unit problems

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16:16 CET+01:00
German media group Springer has said it posted a loss last year as it was forced to take a large write-down on the value of its troubled mail delivery unit Pin.

Springer posted a 2007 net loss of €288 million, compared with a profit of €291 million a year earlier, owing to a write-down of up to €620 million on the value of Pin Group, it said.

The decision to revalue Springer's holding in Pin came after talks with its other owners to finance the business failed.

Pin was still looking for a buyer and had already gotten rid of almost 2,800 posts, roughly one-quarter of its workforce, an administrator said Monday.

Managers and administrators of Pin, which has 91 branches, of which 39 have declared bankruptcy and 13 ceased operations, said they were in talks with three "serious" candidates willing to buy what was left of the crippled group.

"If we managed to do a deal with one of the candidates, there is a good chance of saving most of the jobs in the group," said Horst Piepenburg, who has run the company since late 2007.

Springer had said since November that Pin would undercut its annual results.

The publishing and media group had taken a stake in Pin in mid-2007 with the aim of making logistics another pillar of growth.

But as soon as Germany adopted a minimum wage for letter carriers, a decision that undermined Pin's business model, Springer cut off funding.

Meanwhile, sales at the Springer group, which publishes the dailies Bild and Die Welt, gained 8.5 percent to €2.58 billion, excluding revenues from Pin which were reported under discontinued activities.

Core earnings, adjusted for one-time items, rose 12.5 percent to €422 million, Springer said.

It also said that it would raise dividend payments to shareholders to a record level of €4.00 per share from €3.50 in 2006.

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