Agora’s ‘Gazeta Wyborcza’ newspaper copy sales fell in August, with average daily copy sales dropping by 4.6%, compared with the same month in the previous year. In most part, other national newspapers also reported weaker copy sales in August, with ‘SuperExpress’ tabloid down 12.2%, ‘Rzeczpospolita’ broadsheet down by 2.2% and only ‘Fakt’ tabloid up by 1.4%. However, national newspaper circulation increased by 13.2% following the launch of ‘Dziennik’.
Our view: In seasonally weak August, ‘Gazeta’ copy sales came weaker by 1% compared with the previous month, despite heavy promotional support, while its main rival ‘Dziennik’ copy sales increased by 10% to 221 704 copies. We do not expect further negative impact of the news today, after Agora drop by 1%yesterday, as it has been released during trading hours. Nonetheless, we do not view summer months circulation data as indicative for newspaper copy sales in 4Q06, which are important from advertising buyers perspective. We reiterate our Buy rating for Agora based on improved earnings outlook following the announcement of the cost cutting program.