INM-backed firm in Australia posts loss of over €71m

INDEPENDENT NEWS Media’s Australian associate, APN News and Media, has reported an after-tax loss of 98.3 million Australian dollars (€71.7 million) for the first half of the year.

Losses were exacerbated at the media group, in which INM has a 31 per cent share, by a non-cash impairment charge of 156 million Australian dollars, due to a revaluation of its metropolitan newspapers in New Zealand. Profit after tax but before this exceptional item was 21.8 million Australian dollars, down by 46 per cent.

Revenue at APN was flat in the first six months of the year at 508 million Australian dollars. It continued to be affected by weak retail markets and natural disasters such as the New Zealand earthquake and Australian floods. Group earnings, before interest and tax, declined by 24 per cent to 66.5 million Australian dollars.

Although APN’s publishing divisions suffered, its outdoor and radio divisions performed strongly, with increased advertising share in both Australia and New Zealand.

APN announced an interim dividend of 3.5 Australian cents per share, which means a €4.9 million contribution for INM. Davy Stockbrokers expects INM will receive over €15.5 million in cash dividends from APN for 2011.

APN’s impairment is expected to be included in INM’s forthcoming half-year results at a charge of about €36 million. APN is targeting earnings for the second half of the year in line with the same period last year, of 118 million Australian dollars.

Following the announcement, APN’s share price, already down 60 per cent this year, fell by 12 per cent to 78 Australian cents.

NCB Stockbrokers has cut its earnings forecast for INM, citing its debt position and the “extremely challenging” market in Ireland. It has maintained its “buy” recommendation.

“We are cutting our FY2011 and FY2012 forecasts on growing concerns that advertising and circulation revenues will remain under pressure . . .”