Fairfax NZ earnings fall 15% - better than Aust
FAIRFAX Media Group's New Zealand unit, which includes the Dominion Post, Press and Sunday Star Times newspapers, reported a 15 per cent decline in annual earnings, outperforming the company's papers in Australia.
New Zealand earnings before interest, tax, depreciation and amortisation fell to $77.8 million in the 12 months ended June 30, from $91.7 million a year earlier, the Sydney-based company said in a statement. In Australian dollar terms, earnings fell 14 per cent to A$62.3 million. The local unit reported a 5.5 per cent drop in advertising sales to $283.6 million and a 2.2 per cent decline in circulation revenue to $126.2 million.
Costs fell 2.3 per cent to $355.8 million as the media group cut its full-time staff to 1,813 as at June 30 from 2,094 a year earlier and part-timers and casual employees were reduced to 285 from 310.
The New Zealand unit's decline was better than its Australian metro segment, whose earnings fell 21 per cent to A$99 million on a 12 per cent decline in revenue to A$993.7 million, and the regional media group, which reported a 17 per cent drop in earnings to A$170.4 million on a 9.7 per cent slide in sales to A$572.8 million.
Fairfax's radio business boosted earnings 28 per cent to A$17.8 million on an 8.2 per cent gain in revenue to A$105.1 million.
The media company made a net loss of A$16.4 million after writing down the value its Australian regional, printing and agricultural assets by A$444.6 million, narrowing the 2012 loss of A$2.73 billion. That writedown adds to the A$2.8 billion written off goodwill and the value of its mastheads since 2010.
Underlying group earnings fell 38 per cent to A$128 million and revenue declined 8.2 per cent to A$2.03 billion.
"We're responding to difficult conditions by transforming our operations, evolving the way we engage with customers and audiences and developing range of new revenue opportunities adjacent to our core business," chief executive Greg Hywood said. "In our traditional publishing business we're pulling the levers hard to reduce costs."
The board declared a final dividend of 1 Australian cent per share, taking the annual payment to 2 cents.
Fairfax's group cashflow from operations slid 30 per cent to A$186.5 million as a falling interest bill was offset by rising redundancy and restructuring costs.
The ASX-listed shares were unchanged at 58 Australian cents, valuing the company at A$1.36 billion. The stock is rated an average 'hold' based on 13 analyst recommendations compiled by Reuters, with a median target price of 58 Australian cents.