Irish Times registers €37.8m loss for 2008
THE IRISH Times Ltd recorded an after-tax loss of €37.8 million in 2008 as a result of exceptional costs relating to redundancies and website development, and to a writedown in the value of certain investments.
The exceptional items amounted to €45.76 million. This comprised a writedown of goodwill for joint ventures and subsidiaries of €26.4 million; redundancy costs of €11.2 million; an impairment relating to “other investments” of €5 million; and website development expenses of €3.2 million.
Commenting on the current financial year, Maeve Donovan, managing director of The Irish Times Ltd, said the company would post a “cash loss” of €10-11 million. The group is expected to reach “cash breakeven” in 2010.
About €6 million in additional redundancy costs will be booked in 2009. Ninety staff at the newspaper are expected to leave the company as a result of the voluntary redundancy programme.
Annual savings of about €18 million are forecast from the restructuring plan.
Ms Donovan said the 2008 results reflected “the beginning of the downturn last year”.
“Where the recession has really hit is this year,” she added. She said The Irish Times Ltd was well placed to weather the economic storm as a result of having no net debt. The newspaper should also benefit from the reorganisation and an investment in online resources, she added. “We are very well placed when the upturn does come,” Ms Donovan said.
The Irish Times Ltd had shareholders’ funds of just over €33 million at the end of December 2008 compared with €128.4 million a year earlier.
The company made an operating profit last year of €6.4 million before exceptional items – 70.8 per cent lower than the 2007 figure of €21.93 million. This reflected a 9.4 per cent decline in turnover; a 23 per cent drop in advertising revenues; and a 2.2 per cent overall rise in costs.
The group reported turnover of €124.26 million for 2008 compared with €137.2 million a year earlier.
The deficit on the company’s defined benefit pension schemes increased by €57 million during the year to finish at €64.3 million. The company expects to make contributions of €7.78 million to the pension scheme in 2009.
The Irish Times Ltd employed 601 people on average during 2008 compared with 571 a year earlier. This reflects the inclusion of the Gazette newspapers and DigitalworX Ltd as subsidiaries.
The aggregate payroll costs declined to €49.8 million last year from €51.9 million in 2007.
The total remuneration of executive directors and the chairmen amounted to €2.27 million in 2008, down from €3.02 million in the previous year. Of this, executive directors earned €1.4 million, excluding pension costs. This was 32 per cent below the €2.1 million paid out in 2007. The difference reflected their decision to waive their bonuses last year.
The accounts show that editor Geraldine Kennedy and Ms Donovan were paid salaries of €399,000 each in 2008. This compared with €380,000 in the previous period. Both have since agreed to take voluntary pay cuts of 20 per cent, reducing their salaries to €319,200.
Deputy managing director Liam Kavanagh was paid €304,000 last year while deputy editor Paul O’Neill earned a salary of €204,000. Mr Kavanagh and Mr O’Neill have since agreed to voluntary pay cuts of 15 per cent.
David Went, non-executive chairman of The Irish Times Ltd, was paid €108,000 last year, the same fee as in 2007. David McConnell, chairman of The Irish Times Trust Ltd, received €52,000. The newspaper is ultimately controlled by The Irish Times Trust Ltd.