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MILAN, Feb 7 (Reuters) - Italian publisher RCS Mediagroup (RCSM.MI) reported a 26 percent rise in 2007 core profit to 360.3 million euros ($526.9 million) on Thursday, as sales from Spanish publisher Recoletos boosted consolidated revenues.
The company, which publishes Italy’s widest circulation paper Corriere della Sera, said in a statement sales rose 15 percent to 2.74 billion euros.
It said advertising revenues, particularly in its newspapers division, outperformed the market both in Italy and Spain.
The company should benefit this year from a boost in political advertising as Italy heads to a snap election in mid-April, Alessandro Bai-Badino, analyst at Deutsche Bank, pointed out. Italy has tight constraints on political advertising on television.
As the owner of leading sports papers in Italy and Spain, RCS Mediagroup should also benefit this year from the Euro 2008 soccer championship and the Olympic Games.
The Recoletos acquisition weighed on the group, which had net debt of 966 million euros at the end of 2007 from a positive net financial position of 5.7 million euros a year earlier.
Bai-Badino had expected core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), to reach 357 million euros last year with sales up 14 percent.
Excluding revenues from Recoletos, which RCS Mediagroup bought in 2007, sales rose 4.5 percent.
The Milan-based group said that stripping out Recoletos, core profit rose 4.8 percent from 286.7 million euros in 2006.
RCS Mediagroup shares closed down 0.64 percent at 2.47 euros while Milan’s general index .MIBTEL lost 1.88 percent.
The company’s board meets to approve final 2007 results on March 14. (Reporting by Valentina Za; Editing by Quentin Bryar)