Fairfax sees second-half revenue down
Fairfax Media says second-half revenue is on track to be about 8 per cent lower than a year ago as difficult trading conditions persist.
The company, publisher of this website, also expects earnings before interest, tax, depreciation and amortisation (ebitdaa) of about A$500 million ($642 million) for the financial year to the end of this month.
Fairfax shares fell as much as 1 cent, or 1.7 per cent, to 59 cents in early trading. Prior to today's trading, the stock had lost 16.7 per cent in 2012 compared with a flat outcome for the overall market. The shares touched a record low of 56.5 cents on June 6.
That ebitda result, which excludes significant items and intangible impairments, would be down 17.5 per cent from the A$607.4m earnings of a year earlier.
"The fact that they produced an ebitda number such as that is not great but it could be a lot worse,'' said Imran Valibhoy director at equities research group Wise-Owl.com. "It's still going to be tough times to come."
The expected sales drop of 8 per cent for the half implies a moderate deterioration from the 7.5 per cent year-on-year revenue drop for January revealed by the company when it released first-half earnings figures on February 23.
The company's tight rein on costs will see savings on course to exceed the A$40m targeted for the current financial year as part of the Fairfax of the Future strategy, with the pace accelerating, Fairfax said in a statement.
Fairfax's net debt should end the financial year below A$1.1 billion, with the company planning to repay a A$557m eurobond on June 15 using cash reserves and undrawn facilities, said Greg Hywood, the company's chief executive officer, in the statement.
Fairfax joins other media companies in reporting weak trading conditions as advertisers hold back on spending. Ten Network, Seven and APN have all reported downgrades to their outlooks in revent weeks.
Sydney Morning Herald