Argentina's Clarin Sees Little Change in Battle with Govt -CFO

Thursday, November 11, 2010

Dow Jones Newswires
By Ken Parks

BUENOS AIRES (Dow Jones)--Argentina's largest media group, Grupo Clarin SA (GCLA.BA), doesn't expect the administration of President Cristina Fernandez to end its attempts to dismantle the company following the sudden death of her husband and former president Nestor Kirchner last month, a top executive said Thursday.

"We do not foresee any change to the government's behavior... We think the government will continue to attack the independent press as the government continues to believe that all of Argentina's problems are caused and inflamed by the press," Chief Financial Officer Alejandro Urricelqui said in a conference call with analysts to discuss the company's third-quarter results.

Grupo Clarin's shares traded on the Buenos Aires Stock Exchange unchanged at ARS18.00 on Thursday, bringing their year-to-date gains to nearly 93%.

Kirchner was widely viewed as the main power broker in his wife's administration and was fiercely critical of independent media, accusing them of colluding with oligarchs to undermine his government.

Last year, President Fernandez signed a law reorganizing the media industry and requiring Grupo Clarin to sell key assets. Like her husband, Fernandez has accused Grupo Clarin, which controls one of the country's most influential newspapers and two major television channels, of trying to topple her administration through biased reporting.

The government revoked the operating licence of Grupo Clarin's Internet service provider Fibertel in August, and gave it three months to cease operations on the grounds the company lacked the correct permits to offer the service. The matter is now in the courts, where Fibertel has obtained a suspension of the presidential decree revoking its operating license.

In September, the Fernandez administration filed criminal charges against executives of the country's two leading newspaper companies, La Nacion SA and Clarin. The government charged the executives with human-rights violations, saying they colluded with Argentina's 1976-1983 dictatorship to force the local Graiver family to sell their stakes in newsprint company Papel Prensa SA against their will.

"The company's shareholders and management continue to be fully determined to take all the necessary actions in order to safe guard and defend the company's asset value. We have high [faith] in the independence of the judicial powers," Urricelqui said.

Grupo Clarin said earlier Thursday that its third-quarter net profit rose 29.6% on the year to 134 million pesos ($33.8 million). Sales rose 19% to ARS1.99 billion led by growth in its cable TV, Internet access, broadcasting and programming businesses.

Urricelqui forecast growth in earnings before interest, taxes, depreciation and amortization, or ebitda, a measure of cash flow, of about 20% this year.

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