APN News first-half profit tumbles 53% as advertising revenue slides

Friday 21st August 2009

APN News & Media, publisher of the New Zealand Herald newspaper, posted a 53% decline in first-half profit as advertising revenue tumbled.

Net profit fell to A$33.6 million, or 33.6 cents a share in the six months ended June 30, from A$71.9 million, or 14.2 cents, a year earlier, the Sydney-based company said in a statement. Total revenue fell 18% to A$516.7 million, led by a slide in ad sales from New Zealand published, which dropped by a quarter.

“We experienced difficult trading conditions towards the end of the first half, however July and August have seen no further deterioration,” said chief executive Brendan Hopkins. “It is difficult to look forward with any certainty to the full-year result in an environment where key indicators remain mixed in both Australia and New Zealand.”

Shares of APN fell 5.9% to A$1.66 on the ASX today and have climbed 54% in the past three months. Media companies from London to New York have seen advertising revenue dwindle as the global economy slowed and they struggled to compete and make profits online. Rival Fairfax media acquired New Zealand’s TradeMe.co.nz website to regain a share of what used to be classified ads in newspapers.

Tony O’Reilly’s Independent News & Media is APN’s largest shareholder, with a 39% stake. O’Reilly unsuccessfully sought a buyer for the holding earlier this year as he sought ways to reduce debt at his own media company, which publisher’s the U.K.’s Independent.

Sales from New Zealand publishing, APN’s biggest business with the Herald and the Herald on Sunday, fell 25% to A$166.8 million, while EBIT tumbled 47% to A$26.6 million. Australian publishing sales fell 14% to A$131 million and EBIT dropped 37% to A$25.8 million.

Revenue from its billboard outdoor advertising unit fell 9% to A$115 million and EBIT tumbled 77% to A$3.6 million. Australian radio sales fell 7% to A$59.5 million while New Zealand radio revenue declined 23% to A$41.5 million.

APN omitted its first-half dividend after paying 10.5 cents per share a year earlier.

Businesswire.co.nz

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