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Cofina SGPS

Management Reports Aug 1, 2014

9978_ir_2014-08-01_da865ffa-02e4-4d6c-ac79-ac9c065d9906.pdf

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APPENDIX

DIRECTORS' REPORT

30 June 2014

INTRODUCTION 2
STOCK EXCHANGE EVOLUTION 3
GROUP ACTIVITY 5
FINANCIAL REVIEW 6
SECOND SEMESTER OUTLOOK 8
CORPORATE GOVERNANCE 9
LEGAL MATTERS 10
STATEMENT UNDER ARTICLE 246, 1, C) OF THE SECURITIES CODE 12
DECLARATION OF RESPONSIBILITY 12
CLOSING REMARKS 13

06(This is a translation of a document originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails – Note 18)

To the Shareholders

Pursuant to the legal requirements, the Board of Directors of Cofina, S.G.P.S., S.A. (Public Company) hereby presents its Directors' Report for the first semester of 2014.

INTRODUCTION

The Media segment, in Portugal, begun to demonstrate, early in 2014, some signs of recovery, although still tenuous. During the first semester of 2014, advertising revenues increased after more than 24 consecutive months of falling.

In the first semester of 2014, the Group's revenue grew when compared with the homologous period of 2013, and the Group's was able to maintain its market leadership in the main media segments.

STOCK EXCHANGE EVOLUTION

In the first semester of 2014, Cofina's shares increased about 11% over the closing price of the end of the previous year. The market capitalization at that date was of 57 million Euro.

In the first half of 2014, Cofina´s shares were traded at the highest price of 0.75 Euro, and at the lowest price of 0.51 Euro. In total, 74,358,923 shares were traded in the first six months of 2014, which represents 73% of the issued share capital.

The most significant events that affected Cofina´s shares in the first semester of 2014 can be detailed as follows:

  • In the announcement relating to the Group's performance in 2013, disclosed on 6 March 2014, Cofina presented a net consolidated profit of 4.7 million Euro. Operating income decreased 5% amounting to 107.7 million Euro and EBITDA (earnings before interests, taxes, depreciation and amortization) decreased 1.9% when compared with 2012, reaching 16.2 million Euro.
  • In the announcement disclosed as of 24 April, Cofina informed the market about the resolutions of the Annual Shareholders Meeting in which was approved, among other proposals, a dividend distribution of 0.01 Euro per share.

DIRECTORS' REPORT

  • In 7 May 2014, Cofina informed the market that the dividend for the year 2013 would be paid from 22 May onwards.
  • On the same date, in the announcement relating to the presentation of the first quarter of 2014 financial statements, Cofina SGPS, S.A. presented an operating income of 24.1 million Euro, which represents an increase in EBITDA of 9.8% when compared to the homologous period, and net consolidated profit of 0.9 million Euro.

GROUP ACTIVITY

Cofina Group develops its activity in the Media sector and contents.

The key Group Company in this sector is Cofina Media, S.G.P.S., S.A., which owns headings of reference, leaders in their respective segments. In the Group´s publishing portfolio the daily newspaper "Correio da Manhã", the daily sports newspaper "Record", the economic information newspaper "Jornal de Negócios", the free newspapers "Destak" and "Metro", the information magazine "Sábado" as well as other titles, such as "Maxima", "TV Guia", "Flash!", "Vogue" and "GQ" should be highlighted.

Cofina Group's complete structure of participations as of 30 June 2014 is as follows:

According to the data provided by APCT for the first four months period of 2014, "Correio da Manhã" is the most sold newspaper in Portugal, with an average of more than 114 thousand copies sold daily. According to the data provided by this certifying entity, "Correio da Manhã" has a market share of 45.3% (regarding the daily paid generic newspapers segment).

In June 2014, "Correio da Manhã" became the fourth most viewed site in Portugal. "Jornal de Negócios" continues to lead the economic information segment. In June 2014 according to data from Netscope regarding this month, the website "Correio da Manhã" had 12.9 million visits.

"Jornal de Negócios" is the leader in the segment of economic information, with 4.5 million visitors compared to 2.7 million recorded by his most direct competitor.

The Cofina Group ranks second in the online traffic.

FINANCIAL REVIEW

The consolidated financial information of Cofina for the 1st half of 2014, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS), can be presented as follows:

(amounts in thousand Euro) 1H 2014 1H 2013 Var (%)
1H14/1H13
Operating income 51,407 51,032 0.7%
Circulation 26,232 27,702 -5.3%
Advertising 18,195 16,654 9.3%
Alternative marketing products and others 6,980 6,676 4.6%
Operating income by segments 51,407 51,032 0.7%
Newspapers 41,710 40,608 2.7%
Magazines 9,697 10,424 -7.0%
Operating expenses (a) 44,258 45,285 -2.3%
Consolidated EBITDA (a) 7,149 5,747 24.4%
EBITDA margin 13.9% 11.3% +2,6 p.p.
Newspapers EBITDA 7,409 6,695 10.7%
Newspapers EBITDA margin 17.8% 16.5% +1,3 p.p.
Magazines EBITDA -260 -948 -
Magazines EBITDA margin -2.7% -9.1% -
Amortisation na depreciation (-) 1,480 1,800 -17.8%
EBIT 5,669 3,947 43.6%
EBIT margin 11.0% 7.7% +3,3 pp
Net financial income (2,328) (1,629) -
Income before taxes and non-controlling interests 3,341 2,318 44.1%
Income taxes 153 1,857 -91.8%
Non-controlling interests 21 (39) -153.8%
Net consolidated profit / loss (c) 3,167 500 533.4%

(a) Operating expenses excluding amortisation

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

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

In cumulative terms, in the first six months of 2014 revenues grew about 0.7%, which turned into an EBITDA growth of approximately 24%.

Note that in addition to a revenue growth, the results achieved in the semester are the outcome of the Group's strategy focused on optimization and cost control.

The first semester of 2014 was characterized by an increase of the advertising of 9% when compared with the homologous period of 2013, reaching about 18.2 million Euro. The origin of this growth was an organic market growth and the development of innovative activation actions, transversal to all Cofina's publications.

The growth of advertising associated with an effective and continuous strategy of costs control led to a 44% growth of the EBIT, reaching 5.7 million Euros.

The income tax for the first semester of 2014 was positively influenced by the restitution of taxes unduly paid in prior years.

As of June 30, 2014, the nominal net debt of Cofina amounted 70.6 million Euro, which corresponds to a decrease of 2.7 million Euro when compared to the 73.3 million Euro recorded in the end of 2013.

DIRECTORS' REPORT

The main indicators of the main business segments are as follows:

Newspapers:

(amounts in thousand Euro) 1H 2014 1H 2013 Var (%)
1H14/1H13
Consolidated operating income 41,710 40,608 2.7%
Circulation 20,500 21,416 -4.3%
Advertising 15,071 13,531 11.4%
Alternative marketing products and others 6,139 5,661 8.4%
Operating expenses (a) 34,301 33,913 1.1%
Consolidated EBITDA (b) 7,409 6,695 10.7%
EBITDA margin 17.8% 16.5% +1,3 p.p.

(a) Operating expenses excluding amortisation

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

The newspapers segment of Cofina recorded, in the first half of 2014, a total income of 41.7 million Euro, which represents an increase of 2.7% when compared with the homologous period. The advertising income recorded an increase of 11% to 15.1 million Euro; whilst the circulation income dropped approximately 4%, having reached 20.5 million Euro. The alternative marketing products income recorded an increase of 8.4%, reaching approximately 6.1 million Euro.

Therefore, the EBITDA of the newspaper segment, reached in the period under analysis, amounted to approximately 7.4 million Euro, a growth of approximately 11%, when compared with the homologous period. The EBITDA margin amounted to 18%.

1H 2014 1H 2013 Var (%)
(amounts in thousand Euro) 1H14/1H13
Consolidated operating income 9,697 10,424 -7.0%
Circulation 5,732 6,286 -8.8%
Advertising 3,124 3,123 0.0%
Alternative marketing products and others 841 1,015 -17.1%
Operating expenses (a) 9,957 11,372 -12.4%
Consolidated EBITDA (b) -260 -948 -
EBITDA margin -2.7% -9.1% -

Magazines:

(a) Operating expenses excluding amortisation

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

The total income of this segment reached approximately 9.7 million Euro, reflecting a decrease of approximately 7% when compared to the homologous period of 2013.

Circulation income recorded a decrease of 9%, reaching approximately 5.7 million Euro, while the advertising kept the 2013 levels. The alternative marketing products income recorded a decrease of 17%.

The operational costs were reduced by, approximately, 12%. Accordingly, EBITDA recorded in the magazines segment, in the first semester of 2014, was negative 260 thousand Euro, compared to an EBITDA of 948 thousand Euro negative recorded in the same period of 2013.

SECOND SEMESTER OUTLOOK

The second semester of the year should be characterized by a gradual improvement in some economic indicators, particularly in terms of confidence which could have a positive impact on the advertising market. However, it should be noted that the first semester was marked by a non-recurring effect - the World Cup.

Cofina, regardless of the market conditions, will continue its policy of strategic optimization and cost control, aiming the reinforcement of operational efficiency with a clear focus on profitability.

CORPORATE GOVERNANCE

In compliance with the legal requirements in force, the Company is exempted from presenting information regarding Corporate Governance, once this information is only mandatory upon presentation with the Annual Directors' Report. The Annual Report about Corporate Governance is an integral part of Cofina Annual Financial Statements for year 2013 and it is available on our website (www.cofina.pt).

It should be noted, however, that the Annual Shareholders' Meeting held on 24 April 2014 has appointed the corporate boards for the three year mandate 2014/2016.

Therefore, for the Board of Directors, the following members were appointed for the period 2014/2016:

  • Paulo Jorge dos Santos Fernandes President
  • João Manuel Matos Borges de Oliveira Member
  • Pedro Macedo Pinto de Mendonça Member
  • Domingos José Vieira de Matos Member
  • Pedro Miguel Matos Borges de Oliveira Member
  • Ana Rebelo Carvalho Menéres de Mendonça Member

To the Statutory Audit Board the following members were appointed:

  • Pedro Nuno Fernandes de Sá Pessanha da Costa President
  • André Seabra Ferreira Pinto Member
  • José Guilherme Barros Silva Member
  • Luis Filipe Alves Baldaque de Marinho Fernandes Substitute Member

Deloitte & Associados, SROC S.A., represented by António Manuel Martins Amaral or Miguel Nuno Machado Canavarro Fontes, was appointed as Statutory Auditor for the three year period 2014/2016.

LEGAL MATTERS

Own shares

Pursuant to the requirements of article 66 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that as of 30 June 2014 Cofina had no own shares and did not acquire or sell own shares during the semester then ended.

Shares held by Cofina's corporate board members

Pursuant to the requirements of article 447 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that, as of 30 June 2014, the shares held were as follows:

12,886,332
14,784,857
12,292,927
854.500
7,100.000
20,488,760

(a) – 12,886,332 shares represent the total shares of Cofina held by Actium Capital – SGPS, S.A. of which the Board Member Paulo Jorge dos Santos Fernandes is also director and dominant shareholder.

(b) – 14,784,857 shares represent the total shares of Cofina held by INDAZ, S.A. of which the Director João Manuel Matos Borges de Oliveira is also director.

(c) – 12,292,927 shares represent the total shares of Cofina held by LIVRE FLUXO – SGPS, S.A., of which the Director Domingos José Vieira de Matos is also director and dominant shareholder.

(d) – 20,488,760 shares represent the total shares of Cofina held by PROMENDO – SGPS, S.A., of which the Director Ana Rebelo de Carvalho Menéres de Mendonça is director and dominant shareholder.

As of 30 June 2014 the Statutory Auditor and the members of the Shareholders' Meeting and of the Statutory Audit Board held no shares of the Company.

Participation in the Company's share capital

Pursuant to the requirements of articles 16 and 20 of the Securities Code ("Código dos Valores Mobiliários") and article 448 of the Commercial Companies Code, the Company informs that, in accordance with the notifications received, the companies and/or individuals that hold qualified holdings exceeding 2%, 5%, 10%, 15%, 20%, 33% and 50% of the voting rights, are as follows:

Shares held at Direct % of voting
Exceeding 2% of the voting rights 30.06.2014 rights
Credit Suisse Group AG 5,039,060 4.91%
Santander Asset Management (a) 2,177,423 2.12%

(a) – 2,177,423 shares respect to the total shares of COFINA – SGPS, S.A, held by the investment funds managed by Santander Assets Management (107,964 shares held by PPA Santander Fund and 2,069,459 shares held by Portugal Shares Santander Fund).

Shares held at Direct % of
Exceeding 5% of the voting rights 30.06.2014 voting rights
Pedro Miguel Matos Borges de Oliveira 7,100,000 6.92%
Shares held at Direct % of
Exceeding 10% of the voting rights 30.06.2014 voting rights
Indaz, S.A. (a) 14,784,857 14.41%
Actium Capital, SGPS, S.A. (b) 12,886,332 12.56%
Newshold, SGPS, S.A. 12,519,683 12.21%
LIVREFLUXO – SGPS, S.A. (c) 12,292,927 11.99%

(a) – The 14,784,857 shares held by INDAZ, S.A. are attributable to João Manuel Matos Borges de Oliveira, of which he is also director.

(b) – The 12,886,332 shares held by Actium Capital – SGPS, S.A. are attributable to Paulo Jorge dos Santos Fernandes of which he is also director and dominant shareholder.

(c) – The 12,292,927 shares held by LIVRE FLUXO– SGPS, S.A., are attributable to Domingos José Vieira de Matos of which he is also director and dominant shareholder.

Share held at Direct % of
Exceeding 15% of the voting rights 30.06.2014 voting rights
Promendo – SGPS, S.A. (a) 20,488,760 19.98%

(a) – The 20,488,760 shares held by Promendo – SGPS, S.A., are attributable to Ana Rebelo de Carvalho Menéres de Mendonça, of which she is a director and dominant shareholder.

Cofina was not notified of any participation exceeding 20% of the voting rights.

STATEMENT UNDER ARTICLE 246, 1, C) OF THE SECURITIES CODE

The signatories individually declare that, to their knowledge, the Financial Statements prepared meeting the standards of the applicable International Financial Accounting ("IFRS") as adopted by the European Union, for Interim Financial Reporting, give a truthful and appropriate image of the assets and liabilities, financial position and the consolidate results of Cofina, S.G.P.S., S.A. and of the companies included in the consolidation, and that the Interim Management Report describes the evolution of business, the performance and the financial position of Cofina, S.G.P.S., S.A. and companies of the companies included in the consolidation, and contains a description of the major risks and uncertainties that they face.

DECLARATION OF RESPONSIBILITY

The members of the Board of Directors of Cofina, S.G.P.S., S.A. declare to assume responsibility for the information presented herein and assure that the items included herein are true and that, to the best of their knowledge, there are no omissions.

As required by article 8, no. 3, of the Securities Code, the Board of Directors of Cofina, S.G.P.S., S.A. declares that the accounts that integrate this report were not subject to a Limited Review.

As required by article 21 of Decree-Law 411/91, of 17 October, the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security.

CLOSING REMARKS

The Board of Directors concludes by expressing a vote of gratitude to our suppliers, financial institutions and other Group Stakeholders, for the trust demonstrated in our organization. We would like to thank additionally the External Auditor for the cooperation provided in the period and the Statutory Audit Board for the continued monitoring of our operation.

Oporto, 31 July 2014

The Board of Directors

Paulo Jorge dos Santos Fernandes

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

João Manuel Matos Borges de Oliveira

Pedro Macedo Pinto de Mendonça

Domingos José Vieira de Matos

Pedro Miguel Matos Borges de Oliveira

___________________________________ Ana Rebelo de Carvalho Menéres de Mendonça

Article 447 of the Securities Code and Article 14 no 7 of the Securities and Exchange Commission Regulation no 05/2008

Disclosure of shares and other securities owned by Directors and members of the Board, as well as by other people with whom they close relate to, under the terms of Article 248 B of the Securities Code, and transactions over these shares that took place on the period under analysis.

Shares held as of Sahres hels as of
Member of the Board of Directors 31-Dec-2013 Acquisitions Disposals 30-Jun-2014
Paulo Jorge dos Santos Fernandes 3,345,746 - (3,345,746) -
Paulo Jorge dos Santos Fernandes (allocation through ACTIUM CAPITAL - SGPS, S.A.) 9,540,586 3,345,746 - 12,886,332
João Manuel Matos Borges de Oliveira (allocation through INDAZ, S.A.) 14,784,857 - - 14,784,857
Domingos José Vieira de Matos (allocation through LIVRE FLUXO - SGPS, S.A.) 12,292,927 - - 12,292,927
Pedro Miguel Matos Borges de Oliveira 5,628,291 1,471,709 - 7,100,000
Ana Rebelo Mendonça (allocation through PROMENDO - SGPS, S.A.) 20,488,760 - - 20,488,760
Pedro Macedo Pinto de Mendonça 854,500 - - 854,500

Paulo Jorge dos Santos Fernandes

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 3,345,746
12 March 2014 Sell (3,345,746) 0.634900 NYSE Euronext Lisbon -
30 June 2014 - - - - -

Paulo Jorge dos Santos Fernandes (allocation through ACTIUM CAPITAL - SGPS, S.A.)

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 9,540,586
12 March 2014 Buy 3,345,746 0.634900 NYSE Euronext Lisbon 12,886,332
30 June 2014 - - - - 12,886,332

Pedro Macedo Pinto de Mendonça

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 854,500
30 June 2014 - - - - 854,500

João Manuel Matos Borges de Oliveira (allocation through INDAZ, S.A.)

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 14,784,857
30 June 2014 - - - - 14,784,857

Pedro Miguel Matos Borges de Oliveira

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 5,628,291
11 February 2014 Buy 400,000 0.649000 NYSE Euronext Lisbon 6,028,291
12 February 2014 Buy 600,000 0.647000 NYSE Euronext Lisbon 6,628,291
12 February 2014 Buy 1,709 0.642000 NYSE Euronext Lisbon 6,630,000
12 February 2014 Buy 5,008 0.645000 NYSE Euronext Lisbon 6,635,008
12 February 2014 Buy 3,000 0.646000 NYSE Euronext Lisbon 6,638,008
12 February 2014 Buy 5,864 0.646000 NYSE Euronext Lisbon 6,643,872
12 February 2014 Buy 2,500 0.643000 NYSE Euronext Lisbon 6,646,372
12 February 2014 Buy 700 0.643000 NYSE Euronext Lisbon 6,647,072
12 February 2014 Buy 1,800 0.643000 NYSE Euronext Lisbon 6,648,872
12 February 2014 Buy 700 0.643000 NYSE Euronext Lisbon 6,649,572
12 February 2014 Buy 428 0.643000 NYSE Euronext Lisbon 6,650,000
13 February 2014 Buy 448,500 0.640000 NYSE Euronext Lisbon 7,098,500
13 February 2014 Buy 1,500 0.641000 NYSE Euronext Lisbon 7,100,000
30 June 2014 - - - - 7,100,000

Domingos José Vieira de Matos (allocation through LIVREFLUXO - SGPS, S.A.)

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 12,292,927
30 June 2014 - - - - 12,292,927

Ana Rebelo Mendonça (allocation through PROMENDO - SGPS, S.A.)

Date Description Volume Price (€) Local Nº of shares
31 December 2013 - - - - 20,488,760
30 June 2014 - - - - 20,488,760

CONSOLIDATED STATEMENTS OF FINANCIAL INFORMATION FOR THE PERIODS ENDED 30 JUNE 2014 AND 31 DECEMBER 2013

(Translation of financial statements originally issued in Portuguese - Note 19)

(Amounts expressed in Euro)

NON CURRENT ASSETS
6,651,108
7,177,531
Tangible assets
5
91,128,755
90,952,056
Goodwill
Intangible assets
407,395
634,187
Investments in associated companies
4
3,450,607
3,798,159
4
8,570
8,570
Investments held for sale
Investments recorded at fair value through profit and loss
2,051
271
Other non current debtors
350,000
350,000
6
4,373,989
4,697,703
Deferred tax assets
Total non current assets
106,372,475
107,618,477
CURRENT ASSETS
1,989,935
2,251,126
Inventories
9,537,677
9,410,134
Customers
State and other public entities
949,917
1,249,509
85,406
513,568
Other current debtors
6,819,382
5,831,472
Other current assets
Cash and cash equivalents
7
11,405,347
10,316,267
Total current assets
30,787,664
29,572,076
TOTAL ASSETS
137,160,139
137,190,553
EQUITY AND LIABILITIES
SHAREHOLDERS' FUNDS
Share capital
8
25,641,459
25,641,459
Share premium account
15,874,835
15,874,835
5,409,144
5,409,144
Legal reserve
(30,285,140)
(34,335,639)
Other reserves
Consolidated net profit/(loss) for the period attributable to the parent company
3,166,873
4,681,002
Equity attributable to equity holder of the parent company
19,807,171
17,270,801
Non controlling interests
756,357
767,940
TOTAL EQUITY
20,563,528
18,038,741
LIABILITIES
NON CURRENT LIABILITIES
9
7,000,000
9,000,000
Bank Loans
Other loans
9
49,178,931
49,041,611
Pension liabilities
459,894
459,894
10
35,756
35,756
Other non current creditors
8,463,620
8,502,480
Provisions
Total non current liabilities
65,138,201
67,039,741
CURRENT LIABILITIES
Bank loans
7 e 9
10,995,109
7,007,465
Other loans
9
14,080,524
17,900,832
11
249,728
495,474
Derivatives
7,440,379
8,302,428
Suppliers
State and other public entities
4,318,696
2,546,957
Other current creditors
10
4,415,793
5,360,647
9,958,181
10,498,268
Other current liabilities
Total current liabilities
51,458,410
52,112,071
TOTAL LIABILITIES
116,596,611
119,151,812
TOTAL EQUITY AND LIABILITIES
137,160,139
137,190,553
ASSETS Notes 30.06.2014 31.12.2013

The accompanying notes form an integral part of the consolidated financial statements.

The Chartered Accountant The Board of Directors

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS BY NATURES FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2014 AND 2013

(Translation of financial statements originally issued in Portuguese - Note 19) (Amounts expressed in Euro)

Notes 30.06.2014 30.06.2013 2nd quarter
2014
2nd quarter
2013
Sales 26,231,898 27,702,232 13,200,803 13,788,335
Services rendered 18,194,612 16,653,924 10,868,699 8,701,351
Other operating income 6,980,436 6,676,144 3,252,867 3,942,941
Cost of sales (7,229,519) (7,697,136) (3,618,226) (3,774,086)
External supplies and services (20,442,174) (20,631,368) (11,342,729) (11,370,828)
Payroll expenses (16,054,089) (16,541,229) (8,106,073) (8,264,520)
Amortisation and depreciation (1,480,157) (1,799,603) (740,396) (899,785)
Provisions and impairment losses (347,451) (279,005) (184,550) (110,931)
Other operating expenses (184,258) (136,867) (112,513) (71,272)
Financial expenses 12 (2,542,127) (1,881,859) (1,290,863) (935,515)
Financial income 12 213,967 252,575 135,164 202,077
Profit / loss before income tax 3,341,138 2,317,808 2,062,183 1,207,767
Income tax 6 (152,922) (1,856,848) 287,558 (992,897)
Net consolidated profit / (loss) for the period 3,188,216 460,960 2,349,741 214,870
Attributable to:
Shareholders of the parent company 3,166,873 500,310 2,301,806 223,284
Non-controlling interests 21,343 (39,350) 47,935 (8,414)
Earnings per share:
Basic 14 0.03 0.00 0.02 0.00
Diluted 14 0.03 0.00 0.02 0.00

The accompanying notes form an integral part of the consolidated financial statements.

The Chartered Accountant The Board of Directors

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2014 AND 2013

(Translation of financial statements originally issued in Portuguese - Note 19) (Amounts expressed in Euro)

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25,
658
)
- (
)
1,0
25,
658
(
36,
750
)
(
1,0
62,
408
)
- - - (
677
)
- (
677
)
3,8
24
3,1
47
- - - 395
,83
2
3,1
66,
873
3,5
62,
705
21,
343
3,5
84,
048
25,
641
,45
9
15,
874
,83
5
5,4
09,
144
(
30,
285
,14
0)
3,1
66,
873
19,
807
,17
1
756
,35
7
20,
563
,52
8
25,
641
,45
9
25,
,45
15,
874
,83
5
15,
,83
5,4
09,
144
5,4
09,
(
2)
36,
913
,81
3,9
86,
740
33,
(
9)
34,
,63
3,9
86,
740
(
3,9
86,
740
)
,31
4,6
81,
13,
998
,36
6
(
)
1,0
25,
658
,87
17,
,80
739
,99
5
(
39,
)
,94

The accompanying notes form an integral part of the consolidated financial statements.

The Chartered Accountant

The Board of Directors

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2014 AND 2013

(Translation of financial statements originally issued in Portuguese - Note 19)

(Amounts expressed in Euro)

30.06.2014 30.06.2013 2nd quarter
2014
2nd quarter
2013
Profit / (loss) for the period 3,188,216 460,960 2,349,741 214,870
Other comprehensive income:
Items that will not be reclassified to net income - - - -
Items that will be reclassified to net income
Exchange differences arising on translation of foreign operations 210,397 (167,297) 127,455 (270,737)
Changes in cash-flows hedges' fair value 185,435 200,864 92,495 97,944
395,832 33,567 219,950 (172,793)
Total comprehensive income for the period 3,584,048 494,527 2,569,691 42,077
Attributable to:
Shareholders of the parent company 3,562,705 533,877 2,521,756 50,491
Non-controlling interests 21,343 (39,350) 47,935 (8,414)

The accompanying notes form an integral part of the consolidated financial statements.

The Chartered Accountant The Board of Directors

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2014 AND 2013 (Translation of financial statements originally issued in Portuguese - Note 19)

(Amounts expressed in Euro)

Notes 30.06.2014 30.06.2013 2nd quarter 2014 2nd quarter 2013
Operating activities
Cash flow from operating activities (1) 6,950,385 4,703,518 5,566,251 3,689,955
Investment activities
Collections relating to:
Interest and similar income 114,303 139,480 82,912 58,815
Loans granted - - - -
Dividends 420,000 534,303 100,000 239,480 420,000 502,912 100,000 158,815
Payments relating to:
Investments 7 (47,560) (240,000) - (240,000)
Tangible assets (783,620) (2,561,573) (679,183) (780,314)
Intangible assets (126,713) (957,893) (320,132) (3,121,705) (110,179) (789,362) (56,592) (1,076,906)
Cash flow from investment activities (2) (423,590) (2,882,225) (286,450) (918,091)
Financing activities
Collections relating to:
Loans obtained 5,000,000 5,000,000 - - 850,000 850,000 - -
Payments relating to:
Interest and similar costs (2,373,699) (1,565,782) (363,045) (654,207)
Lease contracts (312,046) (585,678) (152,404) (272,639)
Dividends (1,025,658) (1,025,658) (1,025,658) (1,025,658)
Loans obtained (12,750,000) (5,400,000) (8,750,000) (5,050,000)
Supplementary capital - (16,461,403) - (8,577,118) - (10,291,107) - (7,002,504)
Cash flow from financing activities (3) (11,461,403) (8,577,118) (9,441,107) (7,002,504)
Cash and its equivalents at the beginning of the period 7 7,446,155 9,002,300 6,672,853 6,477,115
Changes in exchange rates 869 - 869 -
Variation of cash and its equivalents: (1)+(2)+(3) (4,934,608) (6,755,825) (4,161,306) (4,230,640)
Cash and its equivalents at the end of the period 7 2,512,416 2,246,475 2,512,416 2,246,475

The accompanying notes form an integral part of the consolidated financial statements.

The Chartered Accountant The Board of Directors

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

1. INTRODUCTION

Cofina, SGPS, S.A. ("Cofina" or "Company"), is a public capital company, with headquarters located at Rua General Norton de Matos, 68, r/c, in Porto, and is the Parent company of a group of companies detailed in Note 4, commonly designated as "Cofina Group" which develop their activity in the media sector, mainly dedicated to written press. Its shares are listed in the NYSE Euronext Lisbon Stock Exchange.

The Group owns headings of reference in the respective segments, publishing titles like newspapers "Correio da Manhã", "Record", "Jornal de Negócios", "Destak" and "Metro", as well as the magazines "Sábado", "TV Guia", "Flash!" and "GQ", among others.

During the semester ended as of 30 June 2014, the Group developed its activity mainly in Portugal, having also some interests in Brazil through the investment in Destak Brasil and in the subsidiary Adcom Media (Note 4).

Cofina Group consolidated financial statements are expressed in Euro (rounded to the nearest unit). This is the currency used by the Group in its operations and as so, considered the functional currency. The operations of the foreign group companies whose functional currency is not the Euro are translated to Euro using the exchange rates in force at the balance sheet date. Income and expenses and cash flows are converted to Euro using the average exchange rate for the period. The exchange rate differences originated are recorded in equity captions.

The accompanying consolidated financial statements have been prepared under the going concern assumption.

2. BASIS OF PRESENTATION AND MAIN ACCOUNTING POLICIES

Annual financial statements were prepared in accordance with the International Financial Reporting Standards ("IFRS"), as adopted by the European Union. The financial statements as of 30 June 2014 were prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting.

The accounting policies adopted in Cofina's consolidated financial statements are consistent with those used in the preparation of the consolidated financial statements for the year ended as of 31 December 2013.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

During this period there were no changes in accounting policies nor were detected any material errors relating to previous periods.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

4. INVESTMENTS

Consolidation perimeter

The companies included in the consolidated financial statements by the full consolidation method, their headquarters, percentage of participation held and activity developed as of 30 June 2014 are as follows:

Designation Headquarters Percentage
participation
held
Activity
Parent Company:
Cofina, SGPS, S.A.
Porto Investment management
Efe Erre Participações, SGPS, S.A. ("FR") Porto 100% Investment management
Cofina Media Group
Cofina Media, SGPS, S.A. ("Cofina Media")
Presselivre – Imprensa Livre, S.A. ("Presselivre")
Lisbon
Lisbon
100%
99.44%
Investment management
Newspapers and magazine publication
Edisport – Sociedade de Publicações, S.A.
("Edisport")
Lisbon 100% Newspapers publication
Edirevistas

Sociedade
Editorial,
S.A.
("Edirevistas")
Lisbon 99.46% Magazines publication
Mediafin, SGPS, S.A. ("Mediafin")
Metronews – Publicações, S.A. ("Metronews")
Lisbon
Lisbon
100%
59%
Investment management
Newspapers publication
Grafedisport – Impressão e Artes Gráficas, S.A.
("Grafedisport")
Queluz 100% Newspapers print
Web Works – Desenvolvimento de Aplicações·
para Internet, S.A. ("Web Works")
Lisbon 100% Production and creation of websites for online
business development
Transjornal

Edição
de
Publicações,
S.A.
("Transjornal")
Lisbon 59% Newspapers publication
Cofina - Eventos e Comunicação S.A. ("Cofina
Eventos")
Lisbon 100% Events promotion and organization
Adcom Media – Anúncios e Publicidade S.A.
("Adcom Media")
São Paulo, Brazil 80% Communication and advertising services

All the above companies were included in the consolidated financial statements in accordance with the full consolidation method.

The associated companies, their headquarters, percentage of participation held and activity developed as of 30 June 2014 are as follows:

Designation Headquarters Percentage
Participation
held
Activity
Direct Indirect
VASP – Sociedade de Transportes e Distribuições, Lda. Lisbon 33.33% - Publications distribution
Destak Brasil – Empreendimentos e Participações, S.A São Paulo,
Brazil
23.92% - Investment management
Mercados Globais – Publicação de Conteúdos, Lda. V.N.Gaia 50% - Management of services and
promotion of a financial forum on
the internet

The associated company VASP was included in the consolidated financial statements in accordance with the equity method. The other companies are recorded at cost less accumulated impairment losses.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2014 (Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

Investments in associated companies

The acquisition cost of the associated companies and their book value as of 30 June 2014 are as follows:

Designation Acquisition
cost
Book
value
Equity Net result
VASP – Sociedade de Transportes e Distribuições, Lda. € 6,234 € 3,450,107 € 10,650,165 € 217,340
Destak Brasil – Editora, S.A. (a) - - R\$ 803,248 R\$ 409,084
Destak Brasil – Empreendimentos e Participações, S.A. € 299,064 € 500 R\$ 2,294,426 R\$ 327,666
Mercados Globais – Publicação de Conteúdos, Lda. € 72,000 - (b) (b)

(a) – investment held by the associated Destak Brasil – Empreendimentos e Participações, S.A.

(b) – financial information not available.

As of 30 June 2014 and 31 December 2013 the caption "Investments in associated companies" can be detailed as follows:

30.06.2014 31.12.2013
Financial Investment
VASP – Sociedade de Transportes e Distribuições, Lda. 3,450,107 3,797,659
Destak Brasil – Empreendimentos e Participações, S.A. 154,535 154,535
Mercados Globais - Publicação de Conteúdos, Lda. 72,000 72,000
3,676,642 4,024,194
Impairment losses on investments in associated companies (226,035) (226,035)
3,450,607 3,798,159

Investments available for sale

As of 30 June 2014 and 31 December 2013 the Group has investments available for sale corresponding to minority investments, for which the Group has recorded impairment losses in previous periods, showing on those dates a net amount of 8,570 Euro. As of 30 June 2014 and 31 December 2013, the total value of investments for which impairments in the same amount were recorded amounts to 877,942 Euro.

5. GOODWILL

During the six months periods ended as of 30 June 2014 and 2013, the movement in the caption "Goodwill" fully refers to the effect of the exchange rate change in the goodwill of the subsidiary Adcom Media.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

6. INCOME TAXES

Deferred taxes

The movement occurred in deferred tax assets in the six months periods ended as of 30 June 2014 and 2013 was as follows:

Deferred tax assets
30.06.2014 30.06.2013
Opening balance 4,697,703 5,588,538
Effects in the income statement:
Increase/(Decrease) in tax losses carried forward 2,317,794 932,444
Prior year tax correction following changes in tax rules (2,581,334) (1,542,829)
Effects in equity:
Fair value of derivate instruments (60,174) (72,420)
Closing balance 4,373,989 4,905,733

Tax expenses

Tax expenses recorded in the income statements for the six months periods ended as of 30 June 2014 and 2013 are detailed as follows:

30.06.2014 30.06.2013
Current Tax
Income tax for the period 761,565 412,663
Excess/(Insufficiency) of prior years income tax (135,234) 3,980
Restitution of income tax unduly collected in previous years (736,949) -
Provision for tax claims - 785,000
Deferred taxes 263,540 655,205
152,922 1,856,848

As of 30 June 2014, disputes with the Portuguese tax authorities ("Autoridade Tributária e Aduaneira" or "AT") were still in progress following a Corporate Income Tax inspection with an original amount of, approximately, 13 million Euro being challenged by the tax authorities. Under the adhesion of the Group to the Tax and Social Security Debts' Regularization Exceptional Regime, approved by the Decree-Law n.º 151-A/2013, of October 31 ("RERD"), the Group paid voluntarily, during the year ended as of December 31, 2013, an amount of 2,000,000 Euro, with the corresponding exemption of default and penalty interests and other costs of the tax process. Under that same regime the Group requested the AT the offset of part of the amounts challenged related with that inspection with credits that the Group had over the AT, having obtained, in the first semester of 2014, the approval of the requirement in the amount of, approximately, 5,700,000 Euro. Consequently, the amount of the unresolved contingency, as of 30 June 2014, is, approximately 5,300,000 Euro.

In order to cope with these disputes (including interests and fines), the Group recorded provisions, in past periods, in the amount of 7,595,000 Euro, which correspond to the best estimate made by the Board of Directors, supported by their legal and tax advisers, of the impact that might outcome from the ongoing tax claims.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

7. CASH AND CASH EQUIVALENTS

As of 30 June 2014 and 31 December 2013, the caption "Cash and cash equivalents" can be detailed as follows:

30.06.2014 31.12.2013
Cash 58,004 57,960
Bank deposits repayable on demand 11,347,343 7,258,307
Bank deposits repayable in less than 3 months - 3,000,000
Cash and cash equivalents in accordance with the balance sheet 11,405,347 10,316,267
Bank overdrafts (Note 9) (8,892,931) (2,870,112)
Cash and cash equivalents 2,512,416 7,446,155

During the six months period ended as of 30 June 2014, payments relating to investments were as follows:

Acquisitions Transaction
amount
Amount
paid
Cofina - Eventos e Comunicação S.A. (*) 317,560 47,560
317,560 47,560

(*) acquisition of an additional investment of 30% in share capital

During the six months period ended as of 30 June 2013, payments relating to investments were as follows:

Acquisitions Transaction
amount
Amount
paid
Cofina - Eventos e Comunicação S.A. (*) 317,560 240,000
317,560 240,000

(*) acquisition of an additional investment of 30% in share capital

8. SHARE CAPITAL

As of 30 June 2014, the Company's fully subscribed and paid up capital consisted of 102,565,836 shares with a nominal value of 25 cents of a Euro each. As of that date, Cofina and the Group companies did not hold own shares.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2014 (Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

9. BANK AND OTHER LOANS

As of 30 June 2014 and 31 December 2013, the caption "Bank loans" was made up as follows:

30.06.2014
Book value Nominal Value
Current Non Current Current Non Current
Bank overdrafts (Note 7) 8,892,931 - 8,892,931 -
Bank loans 2,102,178 7,000,000 2,000,000 7,000,000
10,995,109 7,000,000 10,892,931 7,000,000
31.12.2013
Book value Nominal Value
Current Non Current Current Non Current
Bank overdrafts (Note 7) 2,870,112 - 2,870,112 -
Bank loans 4,137,353 9,000,000 4,000,000 9,000,000
7,007,465 9,000,000 6,870,112 9,000,000

As of 30 June 2014 and 31 December 2013, the caption "Other loans" was made up as follows:

30.06.2014
Book value Nominal Value
Current Non Current Current Non Current
Bond loans - 49,178,931 - 50,000,000
Commercial paper 14,080,524 - 14,100,000 -
14,080,524 49,178,931 14,100,000 50,000,000
31.12.2013
Book value Nominal Value
Current Non Current Current Non Current
Bond loans - 49,041,611 - 50,000,000
Commercial paper 17,900,832 - 17,850,000 -
17,900,832 49,041,611 17,850,000 50,000,000

Bond loans

As of 30 June 2014, the non-current liability caption "Bond Loans" refers to a bond loan named "Obrigações Cofina SGPS – 2013/2019", amounting to 50,000,000 Euro, issued by Cofina SGPS, S.A. valued in accordance with the effective interest rate method, with a book value of 49,178,931 Euro. This loan, according to its terms, matures on September 28, 2019.

The main features of this loan are as follows:

  • Issuer Cofina, SGPS, S.A.;
  • Nominal value 50,000,000 Euro;
  • Subscription date 27 September 2013;
  • Maturity 28 September 2019;
  • Reimbursement at par, on interest payment dates, in three equal installments, as of 28 September 2017, 28 September 2018 and 28 September 2019;
  • Interest postponed, corresponding to 6 month Euribor plus a spread of 3.8%.

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

Commercial paper

The liability caption "Commercial paper" relates to two commercial paper programs, in the maximum amounts of 15,000,000 Euro and 7,000,000 Euro, with guaranteed subscription by the banks. These commercial paper programs mature in July 2014 (which was renovated until January 2015) and September 2016, respectively, and bear interest at market rates.

Regarding the second commercial paper program, with maturity as of September 25, 2016, as it can be terminated by any of the parts, in each annual term date of the program, it was classified as current.

Bank loans

The liability caption "Bank loans" relates to a bank loan celebrated in March 2012, which bears interests at market rates and that will be reimbursed until 15 October 2016. The reimbursement plan of the nominal amount of this loan is as follows:

30.06.2014
2015 2,000,000
2016 5,000,000
7,000,000
Short term 2,000,000
9,000,000

10. LEASING

As of 30 June 2014 and 31 December 2013, the amounts payable to fixed asset suppliers related to financial lease contracts were classified in the captions "Other non-current creditors" and "Other current creditors" and had the following reimbursement plan:

30.06.2014 31.12.2013
Year n+1 24,842 24,842
Year n+2 10,914 10,914
35,756 35,756
Short term 143,826 452,993
179,582 488,749

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

11. DERIVATIVE FINANCIAL INSTRUMENTS

As of 30 June 2014, this caption is made of interest rate swaps related to the Group's financing loans. As these derivatives fulfil the requirements of IAS 39 – Financial Instruments: Recognition and Measurement in order to be classified as hedging instruments, their fair value has been recorded under the shareholder's funds' caption "Other reserves", net of deferred taxes.

The movement in these derivatives for the six months period ended as of 30 June 2014 and 2013 can be presented as follows:

30.06.2014
Market-to-market
"Market-to Accrued net of accrued Deferred
market" interest interest tax assets Net Value
Opening balance 495,474 (128,442) 367,032 89,923 277,111
Increases / (decreases) (245,746) N/A (245,609) (60,174) (185,435)
Closing balance 249,728 (128,305) 121,423 29,749 91,676
30.06.2013
Market-to-market
"Market-to Accrued net of accrued Deferred
market" interest interest tax assets Net Value
Opening balance 992,890 (126,878) 866,012 229,493 636,519
Increases / (decreases) (267,531) N/A (273,284) (72,419) (200,864)
Closing balance 725,359 (132,631) 592,728 157,074 435,654

As of 30 June 2014 the Company had engaged in financial instruments contracts for hedging interest rates whose fair value, calculated by the discounted cash flows method, was as follows:

Company
Funding covered
Start date Maturity Index Notional Fair value of financial
instruments
Cofina SGPS, S.A. Bond loan 28/09/2010 29/09/2014 Euribor 6M 20,000,000 (249,728)
20,000,000 (249,728)

12. FINANCIAL RESULTS

The financial income and expenses for the six months periods ended as of 30 June 2014 and 2013 are made up as follows:

30.06.2014 30.06.2013
Financial expenses
Interest paid (1,961,444) (1,320,918)
Interests related with derivatives (249,766) (247,505)
Commissions (316,389) (268,338)
Other financial expenses (14,528) (45,098)
(2,542,127) (1,881,859)
Financial income
Interest received 141,520 80,714
Gains and losses in associated companies
Application of the Equity Method 72,447 171,861
213,967 252,575

COFINA, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

13. RESPONSIBILTIES FOR GUARANTEES PROVIDED

As of 30 June 2014, Cofina had provided guarantees as follows:

  • a) Pledge over 88,883,450 shares of Cofina Media, SGPS, S.A. as a guarantee for an authorized overdraft, to a maximum of 8,000,000 Euro, granted by Banco BPI, S.A., which outstanding debt, as of 30 June 2014, amounts to 6,029,383 Euro.
  • b) Pledge with irrevocable powers of attorney over 88,883,450 shares of Cofina Media, SGPS, S.A. as a guarantee for a Commercial Paper Program structured by Banco BPI, S.A., amounting to 7,100,000 Euro as of 30 June 2014 (Note 9);
  • c) Pledge of 25,350 shares of Edisport Sociedade de Publicações, S.A., in favour of Portuguese tax authorities ("Autoridade Tributária e Aduaneira"), as a guarantee for tax claims.

As of 30 June 2014 Cofina Media group companies had assumed responsibilities for guarantees granted amounting to 552,000 Euro, mainly in relation to advertising contests. These companies had also given promissory notes to guarantee credit facilities amounting to 58,500,000 Euro.

14. EARNINGS PER SHARE

Earnings per share for the six months periods ended as of 30 June 2014 and 2013 were determined taking into consideration the following amounts:

30.06.2014 30.06.2013
Net profit taken into consideration to calculate basic
and diluted earnings per share
3,166,873 500,310
Weighted average number of shares used to calculate
basic earnings per share
102,565,836 102,565,836
Earnings per share:
Basic 0.03 0.00
Diluted 0.03 0.00

15. SEGMENT INFORMATION

According to the source and nature of the income generated by the Group, the following segments were considered:

  • Newspapers
  • Magazines

Since the Group mainly operates in the domestic market, geographic segments are not reported.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2014

(Translation of financial statements originally issued in Portuguese - Note 18)

(Amounts expressed in Euro)

The information for the six months periods ended as of 30 June 2014 and 2013 is detailed as follows:

Eliminations and
consolidations
30.06.2014 New spapers Magazines adjustments Total
Net operating income 41,709,957 9,696,989 - 51,406,946
Operating Cash-flow - EBITDA (a) 7,409,355 (259,900) - 7,149,455
Operating profit 5,948,986 (279,688) - 5,669,298
Eliminations and
consolidations
30.06.2013 New spapers Magazines adjustments Total
Net operating income 40,608,300 10,424,000 - 51,032,300
Operating Cash-flow - EBITDA (a) 6,694,751 (948,056) - 5,746,695
Operating profit 4,915,842 (968,750) - 3,947,092

(a) - Operating profit + amortisation and depreciation

16. NET PROFIT APPROPRIATION

Relating to the year ended 31 December 2013, the Board of Directors proposed, in its annual report, that the net individual profit of Cofina, S.G.P.S., S.A., in the amount of 5,093,237.89 Euro would be transferred to caption "Other reserves", having that proposal been approved in the General Shareholders' Meeting held as of 24 April 2014.

Furthermore, the Board of Directors, proposed the distribution of dividends amounting to 1,025,658.36 Euro, which corresponds to a dividend of 0.01 Euro per share. This dividend was also approved in the General Shareholders Meeting of 24 April 2014.

17. FINANCIAL STATEMENTS APPROVAL

The interim financial statements as of June 30, 2014 were approved by the Board of Directors and authorized for issue on July, 31 2014.

18. EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese, in accordance with International Financial Reporting Standards (IFRS/IAS) and in accordance with the International Accounting Standard 34 – Interim Financial Reporting, some of which may not conform or be required to be generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

THE CHARTERED ACCOUNTANT THE BOARD OF DIRECTORS

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