INM losses grow on weak revenues

Ireland’s biggest newspaper group Independent News & Media (INM) has reported widening losses as revenues and circulation at its titles continue to decline.

The figures come as the media group has struck a deal with eight banks, including AIB and Bank of Ireland, to write off €138 million of its debts. In exchange the banks will receive a €10 million stake in INM, equivalent to an 11 per cent shareholding.

Further restructuring includes using the proceeds of the sale of its South African business for €167 million to pay down debt, raising €40 million in equity and forming a deal with trustees to reduce the losses in the group’s defined benefit pension scheme. More than 100 staff will also be cut from the group’s editorial and advertising team across Ireland.

The group reported a €254.9 million pretax loss for 2012, ahead of the previous year's losses of €63.6 million. Operating profits before exceptional items also fell 20.9 per cent, from €75.5 million to €59.7 million in 2012.

Revenue down
Revenues fell €15.8 million, or 3.3 per cent, to €539.7 million in 2012, as group advertising revenues declined 5.7 per cent and circulation revenues dropped by 3.8 per cent.

However group online revenues rose 21.4 per cent in 2012, with most of the growth coming from its South African market. There are plans to introduce a metered paywall on a number of websites, including independent.ie, in the second half of the year.

A large impact on the annual results came from exceptional item losses of €273.7 million, with €248.7 million attributed to non-cash items. One impairment charge of €135.8 million related to its Australian and New Zealand group APN as it value of its regional titles was written down.

Confident
However INM chief executive officer Vincent Crowley said he had confidence in APN.

significantly undervalued at the moment. It’s in Australia, New Zealand and little bit of Asia, which are economies that are much more robust and promising than Europe and Ireland so we’re not heading out of there any time soon.”

The decline in circulation and advertising revenues has continued in 2013. In the first 16 weeks of business this year, total circulation has fallen 8.8 per cent, or 5 per cent in constant terms. Advertising revenues have also continued to fall, down 13.4 per cent, or 5.6 per cent in constant terms.