Big media firms report tough year

18:38, Feb 21 2013

The New Zealand operations of the region's two biggest newspaper companies have suffered downturns amid continued turmoil in the media industry.

APN News & Media and Fairfax Media both reported financial results yesterday. APN announced a A$455.8 million (NZ$559.4m) annual loss and Fairfax a A$386m (NZ$473m) profit for the half year.

Fairfax's result was inflated by the sale of its remaining 51 per cent stake in Trade Me and other United States-based publications last year. Without these exceptional items, Fairfax's profit dropped almost 39 per cent to A$83m when compared with A$135.7m for the first half of 2011.

Likewise, APN's result included more writedowns of the value of its mastheads to the tune of A$151m, including another A$39.6m from the New Zealand Herald's value on top of the A$372m announced in August.

Excluding the writedowns and other exceptional items, APN's profit still dipped 30 per cent to A$54.4m for the 2012 year.

APN's chairman, chief executive and three independent directors resigned earlier this week after a stoush with the company's largest shareholders, Independent News & Media and fund manager Allan Gray, over how best to service debt.


Chief executive Brett Chenoweth had wanted to initiate a capital raising which could have brought in an estimated A$300m, but the shareholders wanted to investigate other options because they were likely to see their influence diluted under the plan.

APN reported yesterday it had paid off A$180m in debt during the year to A$469m, and had plans to get rid of another "A$40m to A$50m" in the coming year.

Meanwhile, Fairfax's sale of Trade Me allowed it to shed A$717m worth of debt, bringing its debt level down to A$197m.

Both companies have promised cost-cutting initiatives to shareholders and at the same time are talking up their commitment to new digital revenue streams.

The Dominion Post