APN profits plunge 53% as advertising revenue falls

AUSTRALIAN MEDIA firm APN, in which Independent News Media (INM) holds a 32.2 per cent stake, has reported a 53 per cent drop in net profits due to a fall in advertising revenue.

APN is the publisher of more than 100 newspapers in Australia and New Zealand. The company said net income after exceptional items totalled 33.6 million Australian dollars (€19.5 million) in the six months to June 30th, compared with 71.9 million Australian dollars a year earlier.

Revenue at APN’s Australian publishing division fell 14 per cent; sales from New Zealand publishing operations, which account for almost a third of the company’s sales, declined 25 per cent.

Chief executive Brendan Hopkins said while the group was disappointed with the outcome, given the uncertainty affecting its markets “we consider the results to be satisfactory”.

“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,” Sydney-based APN said.

“Trading has stabilised, and for the first time this year, New Zealand publishing earnings and Australian outdoor bookings are ahead of last year,” APN said yesterday.

The company said the Australian publishing division isn’t seeing any improvement in trading.

It said that while July and August had seen no further deterioration, “September onwards looks a little better.”

The company raised 99 million Australian dollars through a share sale in June to repay debt. INM did not partake and its stake was diluted from 39 per cent as a result, although it still remains the largest shareholder.

APN won’t pay an interim dividend. This compares to a payment of 10.5 cents per share a year earlier.

Revenue at APN’s outdoor unit, which sells advertising on billboards in five countries, fell 9 per cent.

Australian radio operations showed the smallest drop in sales of the company’s divisions, with sales declining 7 per cent. Sales at APN’s New Zealand radio unit declined 23 per cent.

The company said online revenues continued to grow and that nzherald.co.nz was profitable after revenue growth of 16 per cent. “We believe revenues will continue to grow organically for some time as the New Zealand online ad market matures,” it added.

INM tried unsuccessfully to sell its holding in APN last year.

INM shares were unchanged at 25.5 cent on the Dublin market yesterday.

In a note to investors, Goodbody Stockbrokers said the results, while acknowledging the difficulties faced by the group over the period, struck a more upbeat tone for the months ahead.

Analysts at Bloxhams said the Australian publishing market had been affected by a fall in property and jobs advertising and was “not seeing any improvement in trading”. – (Additional reporting: Bloomberg)