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APN News returns to profit, sees better 2010 trading, earnings

Tuesday 23rd February 2010

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APN News & Media, the publisher of the New Zealand Herald, turned to a full-year profit after impairments pushed its previous year’s results into the red, and said a pickup in trading in the fourth quarter has continued into the current year.

The net profit was A$92.6 million, or 16.7 cents a share, in the 12 months ended December 31, from a loss of A$23.97 million, or 4.7 cents a year earlier, the Sydney-based company said in a statement. The 2008 result included charges of A$164 million, mostly related to an impairment on assets acquired from Wilson & Horton in 2001. Sales in the latest year fell 14% to A$1.05 billion.

 “The media industry experienced challenging conditions throughout 2009 and APN’s markets were not immune from the global financial crisis,” chief executive Brendan Hopkins said. He noted a “broad trend” towards a resumption of normal trading patterns, with fourth-quarter trading showing some indication of a return to pre-crisis patterns.

Like rival media group Fairfax Media, APN was hit by a downturn in advertising sales across its newspapers, radio stations and magazines in Australia and New Zealand. It slashed costs by A$78 million in the latest year. It will pay a final dividend of 4 cents a share, having omitted its interim payment.

The shares of APN fell 3.8% to A$2.31 on the ASX today, having climbed 95% in the past 12 months.

“The directors have seen an improvement in trading over the fourth quarter and in the early weeks of the New year that provides confidence that 2010 will be a better year,” the company said.

In the final six months of 2009, earnings before interest and tax from APN’s NZ Publishing division fell 11% to A$ 36.4 million, as sales dropped 13%.

Australian publishing EBIT fell 21% to A$33.7 million and earnings from radio stations across the Tasman shed 15% to A$21.5 million. NZ Radio EBIT fell 22% to A$7.7 million and the company’s outdoor advertising unit reported a 47% slump in earnings to A$12.5 million.


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