Fairfax Media has reported an underlying net profit of $83 million for the first half of the year, with revenues from the newspaper side of the business down on the same period last year.
The media company, which announced its half-yearly financial results this morning, has also clarified that it plans to introduce digital subscriptions in the April-June quarter. A metered model was originally slated to be launched by March.
Fairfax reported profits after tax of $386.3 million, up from $135.7 million in the same period last year thanks to the sale of assets including online New Zealand auction house Trade Me and its US agricultural business. When you exclude these sell-offs the result isn’t nearly as rosy: profit after tax was $83 million, down 39% on the year before.
According to CEO Greg Hywood, the numbers are “in line with expectations”.
“For some time we have considered it prudent to manage Fairfax Media on the basis that a significant cyclical upswing was unlikely in the near term,” he said. “The actions we have taken to strengthen our balance sheet and transform our business have been essential, and our progress to date is reflected in today’s result … Our transformation is ahead of schedule.”
In a webcast this morning, Hywood took aim at The Guardian, which will launch later this year with some of Fairfax’s highest-profile writers on its staff roster.
Hywood said The Guardian may be popular in some suburbs of London but is “not a strong competitive brand in Australia”.
The Guardian has an Australian online audience of 1.3 million unique browsers a month compared to around 6 million for the SMH and 4 million for The Age.
Fairfax’s group revenue was down 7.8% on the corresponding period. Revenues for the metro media division fell by 7.4% while the radio division — which includes 2UE in Sydney and 3AW in Melbourne — recorded revenue rises of 7.2%. The Financial Review Group’s revenues fell by 4.7%.
The dire advertising market is hurting the company’s bottom line, with ad revenue down 23.8% for the metro print papers. But the decision to strip out unprofitable sales to far-flung areas and universities appears to be paying off, with revenue from circulation up 24% despite falling newspaper sales.
The company has spent $69 million on its redundancy program, under which 1900 employees will be let go.
Meanwhile, Kerry Stokes’ Seven West Media has reported a loss of $109.3 million. While television revenues were up 1.6%, revenues for the West Australian newspaper stable fell by 14.9%.
The loss was due to $260 million worth of write-downs to the value of the company’s magazine business, its stake in Yahoo!7 and redundancy and restructuring costs. Excluding those one-off costs, Seven West made $142 million in profit.
Correction: An earlier version of this story said Fairfax planned to introduce digital subscriptions for its metro websites in October-December rather than April-June. The article has been amended.
“in line with expectations”. Droll. No wonder he gets the big bucks.
Last time we heard the guy had given up on boring old print and was heralding the Fairfax of the Future!!! Now he’s talking about getting profits from print.
Perhaps because Fairfax digital revenues are going nowhere while everyone else in the market had double-digit revenue growth and solid profit margins.
The man is all spin. So much so that he’s now stuck in a revolving door.
Can’t wait to see the Guardian Australian edition.
I’m an Aussie living in London and a Labour man. From my perspective, Fairfax has become so right-wing it is unreadable. The number of piss-poor, unsubstantiated comment pieces attacking the PM today is outrageous.
If they want to move to the right, fair play. But I won’t continue to patronise them with clicks and eyeballs. Fairfax is dead to me.
Fairfax have delayed their paywall as they are worried about the Guardian. I am surprised the Editor there is continuing with left bias, seeing circulation plummet and cant smell te political winds of change
Suzy, you’re the very definition of delusion.