Cofina SGPS

Earnings Release • May 8, 2015

COFINA, SGPS, S.A. Public Company

Head Office: Rua do General Norton de Matos, 68, r/c – Porto Pessoa Coletiva Número 502 293 225 Share Capital: 25,641,459 Euro

1st quarter '15 FINANCIAL INFORMATION (Non audited)

The consolidated financial information of Cofina, prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards (IFRS), can be presented as follows:

(amounts in thousand Euro)	1Q 2014	1Q 2015	Var (%) 1Q15/1Q14
Operating income	24,085	23,425	-2.7%
Circulation	13,031	12,675	-2.7%
Advertising	7,326	7,186	-1.9%
Alternative marketing products and others	3,728	3,564	-4.4%
Operating expenses (a)	20,894	20,305	-2.8%
Consolidated EBITDA (b)	3,191	3,120	-2.2%
EBITDA margin	13.2%	13.3%	+ 0.1 p.p.
Amortisation and depreciation (-)	740	721	-2.6%
EBIT	2,451	2,399	-2.1%
EBIT Margin	10.2%	10.2%	+ 0.1 p.p.
Net financial income	(1,172)	(845)	-27.9%
Income before taxes and minority interests	1,279	1,554	21.5%
Income taxes	440	545	23.9%
Minority interests	(27)	1	-103.7%
Net consolidated profit / loss (c)	866	1,008	16.4%

(a) Operating expenses excluding amortisation

(b) EBITDA = earnings before interest, taxes, amortisation and depreciation

(c) Net profit / (loss) attributable to the parent company shareholders

Net profit increases approximately 16%

Total revenues of Cofina in the first quarter 2015 decreased 2.7%. Circulation and alternative marketing products and other revenues decreased 2.7% and 4.4%, respectively, while advertising revenues decreased by approximately 1.9%.

During the first quarter of 2015, Cofina continued its thoughtful cost management policy, adapting its structure to market reality. Therefore, operating expenses excluding amortization, reached approximately 20.3 million Euro, which represents a reduction of approximately 3%.

EBITDA recorded in this period was approximately 3.1 million Euro, which represented approximately a 2% year on year decrease. EBITDA margin reached 13.3%.

Consolidated net profit recorded in the end of 1st quarter 2015 was 1 million Euro, which represents an increase of approximately 16%.

As of March 31, 2015, Cofina's nominal net debt was 67.6 million Euro.

Newspapers Segment

(amounts in thousand Euro)	1Q 2014	1Q 2015	Var (%) 1Q15/1Q14
Consolidated operating income	19,523	19,159	-1.9%
Circulation	10,235	10,211	-0.2%
Advertising	5,960	5,804	-2.6%
Alternative marketing products and others	3,328	3,144	-5.5%
Operating expenses (a)	16,094	15,698	-2.5%
Consolidated EBITDA (b)	3,429	3,461	0.9%
EBITDA margin	17.6%	18.1%	+ 0.5 p.p.

(a) Operating expenses excluding amortisation

(b) EBITDA = earnings before interest, taxes, amortisation and depreciation

Cofina's newspapers segment recorded, in the first quarter of 2015, a total income of approximately 19.2 million Euro, a decrease of 1.9% when compared to the same period of previous year. Income from circulation recorded a slight decrease of approximately 0.2%, reaching 10.2 million Euro, while alternative marketing products income and other revenues recorded a decrease of 5.5%, reaching approximately 3.1 million Euro. Advertising income recorded a decrease of 2.6%, reaching approximately 5.8 million Euro.

The revenues of the cable TV channel "Correio da Manhã TV", which are integrated in the newspapers segment, reached, during the first quarter of 2015, about 1.7 million Euro, which represents an increase of approximately 14% when compared to prior year homologous period.

Therefore, EBITDA in this segment reached, in the first quarter of 2015, approximately 3.5 million Euro, a growth of approximately 1% when compared to the prior year homologous period. EBITDA margin reached 18.1%, increasing 0.5 p.p.

Magazines Segment

Total income of this segment reached approximately 4.3 million Euro, reflecting a decrease of approximately 6.5% when compared to 2014 homologous period.

	1Q 2014	1Q 2015	Var (%)
(amounts in thousand Euro)			1Q15/1Q14
Consolidated operating income	4,562	4,266	-6.5%
Circulation	2,796	2,464	-11.9%
Advertising	1,366	1,382	1.2%
Alternative marketing products and others	400	420	5.0%
Operating expenses (a)	4,800	4,607	-4.0%
Consolidated EBITDA (b)	-238	-341	43.3%
EBITDA margin	-5.2%	-8.0%	- 2.8 p.p.

(a) Operating expenses excluding amortisation

(b) EBITDA = earnings before interest, taxes, amortisation and depreciation

Circulation income recorded a decrease of 12%, reaching approximately 2.5 million Euro. Advertising income recorded an increase of 1.2% and alternative marketing products income recorded an increase of 5%. The cost reduction strategy that has been implemented has reduced operating costs by approximately 200 thousand Euro, which represents a decrease of approximately 4%.

EBITDA of the magazines segment recorded in the first quarter of 2015 was of -341 thousand Euro.

Outlook

The second quarter of 2014 was affected by the World Cup, which had an extraordinary impact on the advertising revenues of that quarter. Thus, the expectation for the second quarter of 2015 compared to the same period of 2014 will be affected by this non-recurring event.

COFINA, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS BY NATURE FOR THE YEARS ENDED 31 MARCH 2014 AND 2013

(Amounts expressed in Euro)

		31.03.2015	31.03.2014
Sales		12,675,295	13,031,095
Services rendered		7,185,627	7,325,913
Other income		3,564,057	3,727,569
Cost of sales		(3,192,110)	(3,611,293)
External supplies and services		(9,176,934)	(9,099,445)
Payroll expenses		(7,841,648)	(7,948,016)
Amortisation and depreciation		(721,162)	(739,761)
Provisions and impairment losses		(34,659)	(162,901)
Other expenses		(59,697)	(71,745)
Financial expenses		(847,314)	(1,251,264)
Financial income		2,100	78,803
	Profit before income tax	1,553,555	1,278,955
Income tax		(544,581)	(440,480)
	Net profit for the year	1,008,974	838,475
Attributable to:
Shareholders' of the Parent Company		1,007,895	865,067
Non-controlling interests		1,079	(26,592)
Resultados por acção: Earnings per share
Basic Básico		0.01	0.01
Diluted Diluído		0.01	0.01

COFINA, SGPS, S.A.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 31 MARCH 2015 AND 31 DECEMBER 2014

(Amounts expressed in Euro)

ASSETS	31.03.2015	31.12.2014
NON CURRENT ASSETS:
Tangible fixed assets	5,453,032	5,883,466
Goodw ill	89,152,752	89,316,685
Intangible assets	298,540	489,077
Investments in associated companies	3,783,185	3,860,407
Investments available for sale	28,197	29,498
Investments measured at fair value through profit and loss	7,764	5,482
Other non current debtors	350,000	350,000
Deferred tax assets	2,384,317	2,578,268
Total non current assets	101,457,787	102,512,883
CURRENT ASSETS:
Inventories	1,788,220	1,872,891
Customers	9,576,543	9,088,161
State and other public entities	1,482,202	945,464
Other current debtors	300,031	312,548
Other current assets	8,528,163	7,115,217
Cash and cash equivalents	8,476,905	12,658,992
Total current assets	30,152,064	31,993,273
TOTAL ASSETS	131,609,851	134,506,156
EQUITY AND LIABILITIES

Share capital 25,641,459 25,641,459 Share premium 15,874,835 15,874,835 Legal reserve 5,409,144 5,409,144 Other reserves (26,802,040) (32,913,647) Consolidated net profit for the year attributable to equity holder of the parent company 1,007,895 6,173,887 Equity attributable to equity holder of the parent company 21,131,293 20,185,678 Non-controlling interests 97,226 90,981 TOTAL EQUITY 21,228,519 20,276,659 LIABILITIES: NON CURRENT LIABILITIES: Other long-term loans 48,829,227 49,274,676 Other non current creditors 45,080 45,080 Provisions 10,427,168 10,320,480 Total non current liabilities 59,301,475 59,640,236 CURRENT LIABILITIES: Bank loans 4,732,462 - Other short-term loans 24,150,469 23,496,752 Suppliers 8,385,150 9,158,181 State and other public entities 3,733,518 3,065,338 Other current creditors 4,225,580 5,346,958 Other current liabilities 8,585,140 8,789,570 Total current liabilities 49,079,857 54,589,261 TOTAL LIABILITIES 108,381,332 114,229,497 TOTAL EQUITY AND LIABILITIES 129,609,851 134,506,156	SHAREHOLDERS' FUNDS:

Porto, May 8, 2015

The Board of Directors