Sydney: Fairfax Media Ltd, publisher of the Australian Financial Review, posted a record annual loss after writing down the value of newspaper titles by 2.8 billion Australian dollars (Dh10.76 billion, $2.9 billion), sending its shares down the most in two months.
Net loss widened to A$2.73 billion in the 12 months ended June 24 from a loss of A$391 million a year earlier, Sydney- based Fairfax, Australia’s second-largest newspaper publisher, said in a statement on Thursday. The stock slumped as much as 7.1 per cent, headed for the biggest drop in two months. It had the biggest percentage decline on the MSCI Asia-Pacific Index.
Fairfax, whose titles include the Age and Sydney Morning Herald, is cutting 22 per cent of jobs, closing print sites, charging for online access and plans to convert its main broadsheets to tabloids as it battles slumping advertising and paid circulation. Today’s charge follows more than $3 billion of write-offs announced this year by rivals News Corp and APN News & Media Ltd, and more than A$600 million of impairments Fairfax took last year.
“Unfortunately the 2013 outlook for Fairfax does not look much brighter,” Ben Le Brun, market analyst at OptionsXpress in Sydney, said in an email. “The short term future revolves around Fairfax & other publishers’ online aspirations and how best to monetize their sites. There are still many uncertainties surrounding these plans.”
Fairfax slid 6.2 per cent to 53 Australian cents as of noon in Sydney. The stock has tumbled 26 per cent this year while the benchmark S&P/ASX 200 index has risen 8.4 per cent.
The company reported revenue fell 6 per cent to A$2.3 billion from a year earlier and underlying earnings before interest, tax, depreciation and amortization dropped 17 per cent to A$506 million.
Revenue in the first part of the 2013 financial year is tracking 10 per cent below the same period 12 months earlier, Fairfax said today.
“Economic conditions remain challenged in our core advertising markets,” the company said. “Difficult trading conditions are likely to continue.”
Circulation of the Sun-Herald, Fairfax’s best-selling newspaper, fell 19 per cent from a year earlier in the three months through June, according to the Audit Bureau of Circulation, while editions of the Sydney Morning Herald and the Age were down more than 13 per cent.
The company’s largest shareholder, Asia’s richest woman Gina Rinehart, has clashed with Fairfax management over her desire for more seats on the board. Jack Cowin, who describes himself as a friend of Rinehart, was appointed as a director July 19.
News Corp, the media company controlled by Rupert Murdoch, announced writedowns of $2.8 billion August 9, saying they were principally related to its newspapers in Australia without giving more precise figures.
APN News & Media, in which Independent News & Media Plc. has a 30 per cent stake, wrote A$485 million off the value of its New Zealand publications August 17.