Fairfax Media posts full-year loss on impairment charge for mastheads

Monday 24th August 2009

Fairfax Media, publisher of the Sydney Morning Herald and Sunday Star-Times newspapers, posted a full-year loss after writing down the value of its mastheads amid dwindling advertising revenue.

The net loss was A$380 million in the 12 months ended June 30, from a profit of A$386.9 million a year earlier, the Sydney-based publisher said in a statement. Revenue fell 11% to A$2.6 billion.

In step with newspaper groups around the world, Fairfax has faced a decline in advertising spending as global recession deters companies and individuals from spending while the rise of online media eats away the traditional ‘rivers of gold’ from classified ads. Fairfax has responded to changes in the media market by bolstering its online presence, including its purchase of the TradeMe auction site.

“Among the challenges we’ve faced have been reshaping Fairfax for the future at the same time as dealing with depressed advertising markets,” said managing director Brian McCarthy.

One-time items amounted to A$664.3 million, including A$513 million to reduce the carrying value of mastheads and goodwill. Fairfax’s Sydney and Melbourne metropolitan publications, which include the SMH, the Age and the Australian Financial Review, showed the biggest trading deterioration, with EBITDA tumbling 46% to A$179 million.

Publishing in New Zealand, where its titles include the Press, Dominion Post, Waikato Times and Sunday Star-Times, dropped 41% to A$164 million.The company’s Australian regional and community publications posted a 16% decline in EBITDA, making it Fairfax’s biggest business by earnings.

Fairfax Online EBITDA slipped 0.8% to A$109.6 million.Trade in the first seven week of the current financial year indicates that the decline in advertising revenue has bottomed but is yet to show any recovery, Fairfax said.

Shares of Fairfax climbed 3.6% to A$1.46 on the ASX and have weakened about 4% this year. The company won’t pay a final dividend, compared with a 9 cent payment a year earlier.

Businesswire.co.nz

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