O’Reilly’s APN predicts profits to fall by 5%

APN News & Media — effectively the Australian arm of Independent News & Media (INM) — said yesterday that its profits for its current financial year could fall by as much as 5% due to the worsening global credit conditions.

Australian-based analysts are now suggesting APN’s full-year profits could amount to Aus$141 million (e71.6m) and not Aus$148m (e75.1m), which the company previously forecast.

APN, 40% owned by INM, had already said that net profit for its current year could be at the lower end of analyst expectations. The media group was formally asked this week by the Australian Securities Exchange whether or not it expected a change in profit outcome, following a significant fall in APN’s share price since the beginning of the year.

The media group — which owns a number of newspaper and radio interests across Australia and New Zealand — is also expecting a non-recurring charge of Aus$20m this year, linked with what it called “project restructuring.”

However, part of the blame is also being laid at the door of INM — partly due to the Dublin-based group’s debt levels and the uncertainty about how it may lower them. INM had planned to reduce its debt by around e800m via the sale of its 39% stake in APN; after receiving unsolicited expressions of interest in the asset late last year. However, INM recently said that it was putting those particular plans on hold due to the weak global credit markets.

Instead it is looking at the possibility of selling other non-core assets over the coming months — none of which are expected in Ireland.

It had also been reported that serious buyers for the stake could not be found.

Indeed, APN’s rival Australian media giant Fairfax previously ruled out making a bid for INM’s stake. Since the new year INM has indicated that it is a long-term shareholder in APN.