Fairfax diversification helps first half result

FAIRFAX Media has reported first-half underlying profits of A$157.6 million, down 23 percent, in an announcement to the ASX.

The result, which was in line with analyst predictions, reflected a drop in advertising revenue in difficult economic conditions.

The company recorded a net loss of A$365.3 million after major one-off costs such as the A$62.4 million restructuring expenses and the non-cash impairment of some assets – including a A$447.5 million write-down on the value of its mastheads, licenses and goodwill across all operations.

While the newspaper publishing business took a slight hit based on a declining ad market, online revenues grew 13.7 percent to A$135.1 million.

Both chairman Ron Walker and CEO Brian McCarthy said Fairfax would continue to ride out the economic storm on the strength of its diversified portfolio.

“Our overall trading performance has benfited strongly from the company’s strategy of diversification covering print, radio and online assets across an expanded geographic base,” Mr McCarthy said.

“The diversification strategy was designed to deliver greater revenue stability in an economic downturn and this has been successful.”

Mr Walker said: “The board and management will focus on extracting the best possible performance from our existing portfolio of assets.”

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