Huge Herald writedown plunges APN into loss
$A156 million writedown on New Zealand print assets causes APN News & Media to post $A98.3 million loss.
Tough trading conditions, particular in print advertising, and a stalling New Zealand economy have led APN News & Media to post a $A98.3 million loss in the six months ending 30 June.
The result comes as Forsyth Barr predict APN will drop out of the NZX50 in September following changes in liquidity test methodology.
APN controls a range of print, radio and outdoor advertising assets in Australia and New Zealand including NewstalkZB and the Herald on Sunday. Even excluding a $A156 million impairment charge, net profit after tax was reported to be down 46% to $A21.8 million.
Today's announcement pins the bulk of the impairment charge on a 20% writedown in the value of New Zealand metropolitan print assets - the highest-profile of which is the company's flagship newspaper the New Zealand Herald.
The notes to the accounts say: "This impairment is due to a number of factors, including the impact of the Christchurch earthquakes on the New Zealand economy, the slower than expected recovery of the advertising markets and the ongoing impacts of the global financial crisis."
Directors were keen to note the charge does not diminish its confidence that "these leading New Zealand newspaper titles will continue to be a strong contributor to the group’s future earnings and cash flows.”
Print media in New Zealand and Australia reported revenue declines of 4%, while ebit declined 36% and 39% respectively.
Business in the radio sectors was steady, while revenue growth of 11% in outdoor helped pushed the divisions EBIT up 80%.
APN reported debt of $657.8 million, with an additional $A400 million in undrawn facilities.
Following changes in NZX50 liquidity requirements, Forsyth Barr's Matthew Leech predicts APN will be replaced on the NZX50 by OceanaGold (OGC) in September.
Matt Nippert
Thu, 18 Aug 2011
Thu, 18 Aug 2011
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Huge Herald writedown plunges APN into loss
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