APN reports a 50% drop in profits

APN News & Media – the Australian media group in which Independent News & Media (INM) owns a 32.2% stake – has reported a 36% year-on-year drop in EBITDA and a 50% fall in net after-tax profits for what the company has called a “challenging” first half to the year.

After a failed attempt to sell its stake, INM said earlier this year that it now has no intention of exiting the Australian group.

INM chief executive and APN chairman Gavin O’Reilly, told the group’s shareholders recently that although full-year after-tax profits for APN will probably dip by between Aus$30m-Aus$40m (to around Aus$100m) this year, second half decline is not expected to be big – unlike in 2008.

Earnings before interest, tax, depreciation and amortisation (EBITDA) – for the six months to the end of June – came in at Aus$100.8m, down by 36% on the same period last year. Group revenues were down by 18%, year-on-year, to Aus$516.7m and net profit after tax was down by 50% to Aus$36.1m. There was also a 54% like-for-like drop in first half earnings per share to 6.5c.

Comments by APN’s chief executive, Brendan Hopkins, put a more upbeat tone on things and seemed to back Mr O’Reilly’s outlook from earlier in the year.

“As we indicated in February, the first half of 2009 was likely to be challenging. While we are disappointed with the outcome, given all the circumstances and the prevailing uncertainty that continues to affect our markets, we consider the results to be satisfactory,” Mr Hopkins said.

“We experienced difficult trading conditions towards the end of the first half. However, July and August have seen no further deterioration. September onwards looks a little better” he added.