APN reports falling ad revenue
APN News & Media says advertising revenue has plunged 10 per cent across New Zealand and Australia in the second half of this year.
The publishing company, which owns the New Zealand Herald, previously posted a A$319 million (NZ $398m) loss for the half year to June on the back of impairments in the value of its main mastheads.
It also instigated a strategic review of its New Zealand assets in May which it says it has now been completed, according to a trading update just issued to the New Zealand and Australian share markets.
APN's NZX share price opened this morning at 38 cents while the ASX price was at A31.5 cents.
The company said it expected earnings before interest, tax, depreciation, amortisation and "exceptionals" [EBITDA] for the full year would be between $150m and $155m, while net profit after tax and before "exceptionals" would be between $51m and $54m.
APN said the strategic review had involved discussing strategic options and consolidation opportunities across the New Zealand market with "a number of parties".
The company announced last month that it was looking to sell The Star newspaper in Christchurch, the Oamaru Mail and the Capital Community Newspaper group in Wellington and has "received substantial buyer interest".
"Our primary objective for this review was to maximise shareholder value. Many of the opportunities we considered have not been pursued as they failed this basic test," said APN chief executive Brett Chenoweth.
"We have many of the best media assets in the country and if new partnerships or structures do not add value we will not pursue them."
APN has already changed the Herald's format from broadsheet to compact size and is currently cutting more editorial staff from its newsroom.
The company said cost cutting initiatives had generated A$25m in savings across the business in 2012 and a similar result was expected in 2013.
In August APN announced it was in the process of "reducing its headcount" by a further 100 employees in the New Zealand publishing business in 2012, adding to the 400 redundancies which have been made in the past three years.
EBITDA from APN's New Zealand media businesses was expected to be up on the first half result of $16.9m, which was 23 per cent down on the previous corresponding half in 2011.
Advertising revenues in New Zealand were expected to be down 9 per cent for 2012, with the majority of the shortfall attributed to declines in display and employment advertising, and some due to the comparison of the Rugby World Cup in late 2011.
Online voucher seller GrabOne's revenues were increasing "month-on-month" and was expected to contribute $4m to APN's earnings for the year.