First-half fall in profits at APN

PROFITS AT Australian media group APN, in which Independent News Media has a 39.1 per cent stake, fell in the first half of the year, writes Ciarán Brennan.

Revenues dropped by 1.49 million Australian dollars to A$599.8 million (€352 million), while earnings before interest and taxation (EBIT) before non-recurring items for the period was A$139 million, compared with A$142.4 million last year.

Pretax profits fell to A$97 million for the six months to June 30th, down from $109.5 million for the same period last year and profit after tax slipped to A$72.3 million from last year's A$73.2 million.

While its Australian and Asian businesses performed well in the first half, APN said its New Zealand businesses were hit throughout the period by the economic slowdown.

Revenue in its New Zealand businesses, which account for around 47 per cent of the group, fell by 2.4 per cent, while earnings fell by more than 10 per cent.

APN chief executive Brendan Hopkins said the board was comfortable with the consensus full-year forecast of A$162 million net profit after tax for the company.

However, this would largely depend on the performance in the final quarter, where 33 per cent of EBIT traditionally occurs, and there being no further deterioration in the New Zealand trading environment.

Mr Hopkins described APN's outdoor business as the "standout" performer in the first half and said it had acquired Media1, New Zealand's third-largest outdoor advertising business, which he said had cemented APN's position as the largest outdoor operator in that market.

"The outdoor division delivered a strong result, with particularly good growth in Australia and Asia, lifting overall EBIT by 74 per cent," APN said.

Analysts said that the results would suggest some downward risk for forecasts. "We are unlikely to make any significant changes to our numbers in light of these results, though the risk is on the downside," NCB said in a note.

Davy analyst Ivan Skelly said the results were in line with guidance contained in the trading update on July 1st.

"INM's diversified global media interests offer significant protection from the earnings volatility experienced by some of its peers which are more exposed to single markets," he said.