Australia's Fairfax posts $408mn loss

The profit slump for Fairfax Media, which owns The Sydney Morning Herald, Melbourne's The Age and The Australian Financial Review, compares with last year's profit of Aus$282.1 million.

Fairfax has faced sliding advertising revenues and falling readership for its national and capital city papers, and in May announced a restructure that will see sub-editing duties no longer carried out in house.

"Fairfax Media is aggressively responding to structural changes in the media landscape while also dealing with the challenges of a prolonged cyclical downturn," chief executive Greg Hywood said.

"We have the right strategy and are working to build long-term shareholder value. Our focus is on improving operating performance and growing long-term sustainable earnings."

Hywood said while the company had reported an after tax loss, this was due to substantial impairment and restructuring charges.

"The vast majority of these charges are of a non-cash nature and have no impact on the operating strength or debt levels of the company," he said.

Fairfax said it had written down the value of mastheads, customer relationships and goodwill by $650.7 million after reviewing the intangibles on the balance sheet, while restructuring costs totalled $23.9 million.

Underlying net profit was down 2.3 percent to $283.8 million for the financial year ending June 2011 while revenue of $2.5 billion was broadly in line with last year.

Fairfax said market conditions were challenging, with advertising and other revenue increasing by more than five percent in the six months to December, only to reverse in the second half on subdued consumer confidence.

Circulation revenues were also down, falling 5.3 percent on last year.

Fairfax, which dominates Australian newspapers along with Rupert Murdoch's News Ltd, owns websites, newspapers and radio stations in Australia and New Zealand.

Copyright AFP (Agence France-Presse), 2011