Reuters Posts $131 Million Loss

By: (AP) Financial news and information provider Reuters Group PLC posted its first loss as a publicly listed company Tuesday and said that its core business remains challenging.

Reuters reported a net loss of 84 million pounds ($131 million), for the six months to June 30, compared to a net profit of 271 million pounds ($423 million) for the same period a year ago.

The loss stemmed from a 38% decline in revenues to 301 million pounds ($470 million) at its electronic brokerage arm Instinet and a 156 million pound ($243 million) restructuring charge.

Nicola Stewart, a media industry analyst at investment bank WestLB Panmure, attributed the loss largely to Reuters' restructuring costs and said the result was generally in line with expectations. "On a straightforward operating basis, it's not that bad," she said.

Reuters' operating profit, excluding one-time gains and losses, was 190 million pounds ($296 million), down from 256 million pounds ($399 million) last year.

Reuters, which employed about 19,000 people worldwide at the end of 2001, has announced plans to shed 2,750 jobs so far this year as part of a campaign to streamline operations and reduce costs. Of the jobs to be cut, the company said in June that 650 will be management positions aimed at saving it 100 million pounds ($156 million) a year.

Reuters expects the restructuring plan to save it 335 million pounds ($523 million) in 2003.

"We expect market conditions to remain challenging, but we are taking the tough actions needed to protect our franchise, improve our competitiveness, and position us for profitable growth when markets recover," said chief executive Tom Glocer on Tuesday.

The company's revenues for the first half were 1.84 billion ($2.87 billion), against 1.94 billion ($3.03 billion) a year ago. Net debt at the end of June was 203 million ($317 million).

Credit Agricole analyst Alex de Groote said Reuters was continuing successfully to integrate business units that it acquired from now-defunct data provider Bridge. However, the company's key client base, the financial services industry, shows "no sign of recovery yet," he said.

Reuters reiterated its outlook for a 5% to 6% fall in underlying revenues from core operations in the second half, but Glocer declined to give any projections for 2003.

Reuters has earned a net profit in each reporting period since it became a publicly listed company in May 1984.