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Another Australasian media company - APN News & Media - is reducing the value of key assets as the advertising downturn bites on both sides of the Tasman.
The owner of half of New Zealand's newspaper and radio industries yesterday reported underlying profits of A$140.1 million ($177 million) for the 12 months to December 31, down 17 per cent from A$169.5 million in 2007.
With an A$146.8 million reduction in the valuation of New Zealand assets bought from Wilson & Horton in 2001 - mostly related to the New Zealand Herald - the company wound up with an A$24 million reported loss for the year. Nearly all APN operations have been hit by falling revenue and chief executive Brendan Hopkins said the annual result was satisfactory in a tough market.
Other media companies have faced a downturn in the last quarter of 2008, which continued into the first part of 2009.
Yesterday Australian TV network Seven wrote off A$793 million from the value of its stake in the Seven Media Group which is in a joint venture that half-owns Yahoo7. Seven Network - led by Australian billionaire Kerry Stokes - said the move largely reflected "the current global economic challenges and declines in the overall advertising market".
Earlier this week Fairfax Media announced an A$447.5 million writedown in the value of its mastheads. Including the writedown, the company made a loss of A$365.3 million for the six months.
APN's Hopkins described the advertising market as the worst since APN had been publicly listed.
He predicted that the profit was likely to be down a further A$20 million at the end of the year to A$120 million.
But he predicted that most of the shortfall against 2008 would occur in the first half of the year and not the second. The company - with assets including the Herald and The Radio Network - showed falls in revenue and earnings before interest and taxation (ebit) at all operating divisions, except online.
Revenue was down 6.1 per cent across the group and 7.2 per cent in the publishing arm.
Hardest hit by the downturn was the New Zealand National publishing arm, where revenue was down by 14.4 per cent, with earnings down 25.8 per cent to A$71.1 million.
New Zealand regional publishing assets - such as the Bay Of Plenty Times, Northern Advocate and Daily Post - saw revenue fall by 10.5 per cent and earnings drop by 32.8 per cent to A$20.4 million.
Australian publishing revenue was down marginally and earnings down by 11.3 per cent to A$84.3 million.
Radio revenue - covering both Australia and New Zealand - was down 9.2 per cent and ebit down 18.8 per cent to A$68.9 million.
New Zealand radio revenue - through its 50 per cent stake with Clear Channel Communications in the Radio Network - was down 6.9 per cent and earnings down 22.6 per cent to $24.7 million.
Hopkins said that in the new year January and February has been slow but trading indications for March were better on both sides of the Tasman.
He said that the company had reduced costs and pushed back debt, with only 25 per cent of debt maturing in the next two years.
The company announced a dividend of A12c a share, bringing the total for the year to A22.5c a share compared with A31.5c a share for last year.
Late last year the company's controlling shareholder, Dublin-based Independent News & Media, reviewed its stake in the firm. But it ended the review saying ructions in global business meant that there were no adequate offers.
Television New Zealand last Friday revealed plans to cut costs by $25 million by June due to a 10 per cent advertising downturn.
Sky TV posted a 17 per cent fall in half-year profit due to falling advertising revenue on its Prime TV.
Shares in APN News & Media closed steady at $1.75 yesterday on the NZX.
