Metro International shares have plummeted on news of increased losses and a prospective bid falling through, but CEO, Per Mikael Jensen, remains optimistic.

“It was not a good quarter, but we could have done much worse,” Jensen told me, after the company posted grim financial news this morning.

Its net losses for the first quarter (Q1) of 2009 more than doubled compared to the same period last year, from 6.4 million euros to 15.3 million euros, and year-on-year net revenues decreased 24 per cent to 55.6 million euros from 73.4 million euros in Q1 2008.

The freesheet giant also announced that a mystery bid, which led the company to postpone seeking a rights issue to raise more capital earlier this year, had been stranded on the bidder’s inadequate financing arrangements.

The news caused Metro shares to fall sharply, but when I talked to Jensen, he professed to take comfort in the share doing better than before the bid emerged in February.

“I think people were calculating on a divestment,” he said, adding that he was not sure if the timing of the rights issue, which will now go ahead, would be any worse than two or three months ago.

In January, Metro shocked the market by closing its fully owned operation in Spain, which published the free daily newspaper Metro in seven Spanish cities, with immediate effect. However, in the last few months the company, which has 81 editions in 22 countries, has launched titles in Moscow and Mexico’s second city, Monterrey.

“It’s been our expressed strategy to grow in Russia, Asia and Latin America, markets that are not as mature as the European, for some time now,” Jensen said.

Read more about the consequences of the recession for free newspapers here.