Australian advertising drought causes INL profits to dive

By SIMON HENDERY media writer

Independent Newspapers' six-month profit has fallen 41 per cent after an advertising drought in Australia and continued losses from its investment in growth-focused Sky TV.

INL yesterday reported a $14 million profit for the six months to December 31 - down from $23.8 million for the 1999 period.

The company said a solid performance from New Zealand was offset by a drop in profit for its Australian newspapers, hit by an industry-wide fall in advertising spending after the Sydney Olympics and GST.

INL also lost $9.3 million through its 47 per cent holding in Sky Network Television, which on Thursday reported a $19.6 million six-month loss.

Losses from INL's internet operations rose from $500,000 to $2.1 million after the launch of its Stuff website, but the company said this involved mostly one-off costs.

Newspaper advertising revenue in New Zealand was up 2.2 per cent.

The company said its two Wellington daily papers, the Dominion and Evening Post, led advertising sales, and its Wellington community papers also performed strongly.

The Christchurch Press' performance was flat, but its colour advertising earnings potential would increase this year with a $9 million press extension.

INL's magazine division was hurt by continuing losses from its glossy women's title Grace, which closed in December.

UBS Warburg analyst David Lane said the group's result was reasonable given that overall advertising spending in New Zealand stalled at the end of last year.

Sky TV was performing as expected for a business in growth mode.

INL will pay a 4c a share interim dividend. Its shares closed down 8c at $3.62 yesterday.