Fairfax CEO Praises “Good Result” Despite 54% Half-Yearly Profit Slump

Publishing giant Fairfax Media has suffered a significant fall in profit for the first half of the 2018 financial year, but CEO Greg Hywood says the company is “strongly positioned”.

Released today, Fairfax’s half-yearly results showed a 54 per cent drop in net profit to $38.5 million, while revenue decline by 3.9 per cent over the six months to 31 December 2017 to $877.1 million.

Excluding significant items, Fairfax’s earnings before interest, taxes, depreciation and amortisation before significant items increased by 1.3 per cent to $146.9 million, while the group’s underlying net profit fell 9.9 per cent to $76.3 million.

Hywood said described Fairfax’s half-yearly financial performance as a “good result”.

“It shows the solid performances of our businesses – virtually across the board – and demonstrates the strength of the Fairfax Media portfolio,” he said.

“We will take advantage of opportunities arising from media consolidation as and when it occurs. Any decisions we take will be in the best interests of our shareholders.”

Looking at the company divisions, Domain’s revenue rose 12.5 per cent in the first half of FY18, with digital revenue up 22.3 per cent.

It’s metro publishing division, which includes The Sydney Morning Herald and The Age, saw revenue fall 9.1 per cent, but Hywood noted this decline was offset by a 11 per cent reduction in costs – largely from savings in staff, technology and print production.

Publishing advertising revenue for Fairfax’s metro publishing arm decreased by 15 per cent over the period.

“Metros are in good shape – the best they’ve been in recent history. And there’s more to come,” Hywood said.

“Initiatives to deliver rapid innovation across consumer products and advertising is well underway – and we haven’t let up on driving cost efficiency.”

Fairfax’s community media revenue dropped 6.0 per cent, while revenue from Macquarie Media fell 1.3 per cent.

The group’s New Zealand business, Stuff, experienced a revenue decline of 8 per cent to $146.6 million. Hywood also announced Fairfax will exit 35 per cent of its NZ print publications through sale or closure.

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