THE Australian media group John Fairfax Holdings yesterday blamed higher paper costs and increased depreciation as its net profit fell 41 per cent from a year earlier to Aus$87.43 million (£42.4 million) in the year to June 30th.
The slump occurred despite an improvement of more than 5 per cent on sales of Aus$995.06 million, compared to, Aus$944.51 million for the previous year.
"The decline in profit can be attributed to an increase in newsprint and coated paper costs of Aus$35 million, depreciation of Aus$15 million and interest of Aus$7 million," the company said in a statement.
The consolidated net profit was slashed by hefty abnormal charges of Aus$21.93 million, more than double the abnormal loss of Aus$10.87 million for the same period last year.
These were related to employee redundancy costs, following closure of the Broadway plant in Sydney and a major upgrade of production facilities in Melbourne.
The group had predicted in May that adverse economic conditions would slash its results and said earnings before interest and tax (EBIT) would be between 20 and 25 per cent lower for the full year.
However, EBIT fell by only 14.8 per cent to Aus$237.14 million.
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