Swedish free daily eyes a "positive trend" as advertising recovers.

• Metro dumps its Greek division because of crisis

The Swedish publisher of free newspapers, Metro International, said on Monday it had narrowed its losses in the second quarter and earnings were now on a "positive trend" as advertising recovered.

Between April and June, Metro suffered a net loss of some 400,000 euros (520,000 dollars) after a loss of 3.7 million euros for the same period in 2009.

Sales rose 10 percent to 54.4 million euros.

The company turned a profit in the last quarter of 2009. It lost money in the first quarter of this year but said market conditions were improving.

"The positive trend from the first quarter has continued into the second quarter," chief executive Per Mikael Jensen said in a statement, adding the group's performances had been particularly strong in Sweden and Hong Kong.

He said the company was on a good track to post a profit in 2010.

"A more positive outlook in advertising markets allows us to re-confirm this message with greater confidence," he said.

Since the beginning of the global economic crisis, which sent advertising sales worldwide plunging, Metro has focused on its main north European markets.

It shut down its Spanish business and has sold its US, Italian and Portuguese divisions.

Metro is published in 19 countries with some 17 million daily readers, the company says.