APN News & Media hit by natural disasters and weak retail markets

AUSTRALIAN media group APN News & Media became loss-making in the first half of this year due to weakening retail markets and natural disasters in its core markets.

Fri, 19 Aug, 2011 - 01:00

Geoff Percival

The Aus$62.56m (€42.1m) pre-tax profit seen in the first half of 2010 fell to a loss of Aus$131.6m (€96.9m) in the first six months of this year.

The Sydney-headquartered group — which is 31% controlled by Dublin-headquartered Independent News & Media (INM) — said that a mix of poor consumer confidence along with floods and earthquake damage affected operations.

APN’s first half revenue amounted to Aus$508m (€374.1m), up only marginally on the same period last year and it lurched from a first half 2010 earnings per share of 6.5c to a 16.1c loss per share for the first six months of 2011.

Due to a non-cash impairment charge of Aus$156m, APN also delivered a first-half after-tax loss of Aus$98m.

“Our greatest challenge in the first half came from the publishing businesses in Australia and New Zealand. Consumer and business confidence in those local markets began to deteriorate late in the fourth quarter of last year.

The flooding in Queensland and the earthquakes in New Zealand exacerbated the general slowdown,” according to chief executive Brett Chenoweth.

“This was a challenging six months of trading. While our publishing businesses in Australia and New Zealand have faced difficult economic conditions in their core markets, our outdoor and radio businesses have produced robust results,” he said.

The radio divisions of Australia and New Zealand saw a combined year-on-year revenue increase of 9%, while APN’s outdoor advertising division grew its revenues by 15% on an annualised basis.

APN gave an uncertain outlook for the full year, saying that it’s yet to see a serious pick-up as it enters its stronger second half. Meanwhile, the underwhelming news for INM was added to by NCB Stockbrokers cutting its 2011 and 2012 full-year estimates for the group, although it still does rate its stock as “buy”.