Fairfax profits fall in NZ, Trade Me still strong

Revenues from New Zealand publishing fell nearly 20pc for Fairfax in the past year, though Trade Me revenue was up 16.2pc. Photo / Hawkes Bay Today

Australian-based Fairfax Media today reported a lower profit in its New Zealand publishing unit and is not signalling a quick turn around in the business.

The company's online auction site Trade Me continued to perform strongly.

Revenue from New Zealand Publishing in the year to June 30 was A$410.1 ($507.42) million, down 19.4 per cent from the same period last year.

Earnings before interest, tax, amortisation and depreciation (Ebitda) from New Zealand Publishing were A$97.2m, down 40.8 per cent on last year.

In the second half of the year revenue from New Zealand Publishing was A$186.2m, down 24.6 per cent, and Ebitda was A$38.5m, down 53 per cent.

In New Zealand dollar terms, annual earnings before interest and tax (Ebit) for New Zealand Publishing fell 41.6 per cent to $103.6m on a 15.2 per cent fall in revenue.

Trade Me is part of the online division, which increased Ebit by 5 per cent to A$94.7m.

Trade Me increased revenue by 16.2 per cent and Ebitda by 11.5 per cent. It experienced growth in all revenue categories and grew its market share, the company said.

On Friday rival APN News & Media said it expected New Zealand to be its first market to emerge from the downturn.

Australian based APN's interests include The New Zealand Herald, nine regional newspapers, New Zealand Magazines and The Radio Network.

Fairfax chief executive Brian McCarthy told analysts: "I'm not prepared to stand here and say we have seen a turn around in New Zealand. If APN is saying that, that's great. I'm not prepared to stand here and say that."

He said Fairfax had seen a continuation of the trend through June and July in the first few weeks of August.

McCarthy said the New Zealand publishing business was more cyclical than the Sydney and Melbourne markets.

"It is going to be tough for a while over there," he said.

APN ran a more centralised editorial production model.

"I would rather have a higher cost base and remain local and relevant than to take the costs away," McCarthy said in comment on the issue.

Fairfax was looking at asset sales but was not considering any major business sales, analysts were told.

Australian media reported that McCarthy was open to talking to competitors about getting readers to pay for online content but any agreement would be subject to competition regulators.

Fairfax's publishing assets in New Zealand include 80 newspapers, four agricultural titles, 23 magazines, 51 websites and eight printing centres, according to a presentation to investors.

- NZPA