Australias Fairfax Media flags $760m in writedowns
Like its global peers, the group, which owns The Sydney Morning Herald and The Age newspapers, has had add to slash jobs and costs owing to falling
circulation and
advertising revenue
AFP
AFP, SYDNEY: Leading Australian publisher Fairfax Media said yesterday it would post nearly Aus$1 billion in writedowns in the year to July, while it announced the creation of a new reporting segment for its lucrative online real estate division.
Like its global peers, the group, which owns The Sydney Morning Herald and The Age newspapers, has had add to slash jobs and costs owing to falling circulation and advertising revenue.
Most of the Aus$989 million (US$750 million) pre-tax impairment charges for the 2016 financial year come from major Australian metropolitan newspapers, accounting for Aus$484.9 million. Impairments for smaller, community media amounted to Aus$408.8 million.
Fairfax said its property listings division Domain Group would form a separate reporting segment.
Chief executive Greg Hywood said the adjustments reflect the market realities that the metro business is facing, adding that the media divisions in the rural, regional and New Zealand divisions were also experiencing challenges.
But with speculation swirling that the Domain separation could eventually lead to the group selling the real estate division or newspapers, Hywood said the unit remains an integral and growing part of Fairfax.
We have no plans for that to change, he added in a statement.
Fairfax, which has newspaper, radio and digital interests, is the main rival in Australia to News Limited,
Rupert Murdochs Australian empire, which is also suffering from falling revenues.
The group has shed thousands of staff and restructured its operations in recent years to be more digital-facing as the internet and new publishers such as Google disrupt its business model.
The traditional business of Fairfax is facing all the same challenges as in the UK and America; that that side of it is probably not worth very much money now, media analyst Peter Cox told AFP. Therefore theyve written off on it in that regard, and Domain is where their value lies at the moment.
Fairfax reported net profit after tax of Aus$27.4 million for the six months to December 31, 2015.
Domain recorded operating profits of Aus$65.7 million for the period, out of a total of Aus$161 million for the whole group.
Fairfaxs New Zealand division, which is currently in talks to merge with publisher NZME, is set to record a writedown of Aus$95.3 million. The company reports its full-year results on August 10.
