NEW YORK Aegis Group has reported a 9.2 percent decline in first-half revenue on a constant currency basis to $1.04 billion. That's a 10.8 percent decline in organic terms, which exclude the impact of acquisitions and currency fluctuations.
The company's generally down results followed the pattern of other agency holding companies recently reporting lower revenue and profits due largely to the recession.
Aegis suffered a loss of $652,000 for the first half vs. a profit of $55 million for the same period a year ago. Operating profit was down 29 percent to $83.3 million. Overall margins dropped to 8.1 percent from 10 percent for the period.
The firm said client media expenditures (and associated fees) across all of its units were down more than 10 percent to about $7.8 billion.
Aegis, the parent of media shop Carat, digital agency Isobar and research company Synovate, said that it had cut costs during the period in anticipation of the downturn but that "the market decline was greater than was expected."
Total operating expenses were down 7 percent for the period and further reductions will be implemented, the company said.
As for the second-half outlook, the company said: "Market conditions are expected to remain difficult and we are not forecasting on the basis of any upturn in the second half, although both Aegis Media and Synovate will face easier second-half comparatives."
At Aegis Media, revenue was down more than 8 percent worldwide and 15 percent in the Americas division. Digital accounted for 31 percent of the unit's revenue, up from 29 percent in the prior-year period.
One bright spot: Aegis Media achieved record net new business of more than $1.8 billion in the first half, more than double its performance for the first half of 2008.
Synovate suffered a 13 percent drop in worldwide revenue to $237 million.
The company said that the entire industry is suffering more from the recession than had been anticipated and that, for the first time, industry revenue growth would be lower than gross domestic product growth, declining by about 4 percent.
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