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Record profits for media colossus Axel Springer

German newspaper publisher Axel Springer’s international newspaper, magazine, and digital media empire raked in record earnings in 2011, company bosses announced on Wednesday.

Record profits for media colossus Axel Springer
Photo: DPA

Springer, which publishes Germany’s mass-circulation Bild daily, said in a statement that net profit rose by 5.6 percent to €289.4 million last year.

Underlying profits, as measured by earnings before interest, tax, depreciation and amortisation (EBITDA), were up 16.2 percent at €593.4 million on a 10.1 percent increase in sales to €3.185 billion.

“We achieved record results in 2011,” said chief executive Mathias Döpfner.

“This development was due to the significant growth of earnings and revenues in the digital media and print international segments as well as the continued high profitability of the national print media.”

In addition to Bild, Springer also publishes the daily Die Welt.

Looking ahead to the current year, Springer said that assuming there was no significant economic downturn, it expected to generate a “single-digit percentage increase in total revenues in 2012.”

While circulation revenues were expected to decline slightly, they would be “more than offset by higher total advertising revenues and total other revenues,” the company predicted.

Any drop in revenue in the national and international print business would be “more than made up´ by higher revenues in the digital media business,” Springer said.

Overall, underlying earnings would be slightly higher than in 2011, with lower earnings in the print business, but “substantially higher earnings in the digital business,” the company said.

AFP/jcw

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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