Fairfax NZ result down, company blames economy

By NZPA

Monday 12th February 2007

Australia-based media company Fairfax has reported lower first-half earnings in New Zealand.

The company run by former All Black David Kirk has always trumpeted the success of its purchase of the former INL Ltd newspapers, including The Press, Dominion Post and Sunday Star Times in New Zealand, but today it said weak economic conditions were affecting earnings.

Fairfax said advertising revenue in New Zealand was down 2.4% in the six months to December from a year ago to $NZ213.9 million.

Earnings before interest, tax, depreciation and amortisation (Ebitda) were down 8.6% to $NZ90.3 million.

Earnings before interest and tax were down 9.3% at $NZ84.7 million.

Costs increased 1.8%, including acquisition costs and severance payments.

The company said the TradeMe website was experiencing strong growth and contributed Ebitda of $NZ23.3 million to the group result in the first half. Listings on the auction website passed 800,000 for the first time in November.

"Slowing conditions in the New Zealand economy reduced advertising revenues. Excluding acquisitions, underlying publishing costs were well contained despite strong inflationary pressures on labour costs with a growth of 0.4%," the company said.

Overall, costs were $NZ200.3 million in the period, including $NZ2.8 million of severance payments. They were $NZ196.7 million last year.

The company said its mastheads had solid circulation and readership performances in the period.

As previously signalled, the business is upgrading its technology systems and it is also running a redundancy programme.

The company's Ebit margin in New Zealand decreased to 29.1% from 31.6%.

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