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APN's profit rises as advertising market recovers

Wednesday 18th August 2010

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APN News & Media's first-half bottom line profit rose 4.9% while underlying earnings were up 11%, reflecting a recovering advertising market. 

APN's net profit rose to A$39 million ($49.5 million) in the six months ended June 30 from A$37.2 million in the same six months a year earlier while the result excluding one-offs and discontinued operations was A$40 million compared with A$36 million previously.

Earnings before interest and tax on a like-for-like basis were up an even stronger 19% on a 5% lift in revenue.

“In Australia we are already seeing our markets recovering from the global financial crisis,” chief executive Brendan Hopkins said. “The recovery in New Zealand is yet to achieve the same pace. However, it is pleasing to report that the second quarter was significantly better than the first quarter and, looking ahead, we see encouraging trends for August and September.”

“Across all of our operations, we believe the second half will continue the trends seen in the second quarter and anticipate a strong end to the year,” Hopkins says. The fourth quarter is traditionally APN's strongest and forward bookings are encouraging, he says.

APN owns The New Zealand Herald and other newspapers and magazines in New Zealand, including The Listener, and The Radio Network which claims a 46% share of New Zealand's radio market.

A breakdown of the results shows its New Zealand media operations reported flat revenue for the six months in local currency terms although EBIT was up 14.6%. They accounted for A$156.4 million, or 30.8%, of APN's A$508.3 million in revenue and A$34 million, or 39%, of APN's $87.1 million EBIT.

However, New Zealand radio revenue was down 2.1% with EBIT plummeting 19.8%. NZ radio accounted for 7.9% of APN's revenue and 5.2% of EBIT.

APN says close relationships with key clients led to a significant increase in multimedia advertising deals. Average weekly audience for the website was 28% higher than in the previous first half.

Australian regional media lifted revenue 6.8% while Australian radio was up 2.4% and their respective EBIT was up 12% and down 4%.

APN's outdoor media operations, which span Australia and New Zealand as well as Hong Kong and Indonesia, lifted revenue 17.7% while EBIT was up five-fold.

APN is 32%-owned by Dublin-based Independent News & Media which is 30%-owned by the O'Reilly family.

Shares of APN last traded at $2.54 on the NZX, unchanged from yesterday.

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