APN full year results:
Revenue - A$1.2bn, down 5pc
Profit - -A$24m, down 114pc
Dividend - 12 cents per share
KEY POINTS:
APN News & Media, publisher of The New Zealand Herald, reported a fall in revenues and earnings in this country for 2008 as advertising spending was hit by tough economic conditions.
Full year revenues, before exceptional items, for the New Zealand National publishing business fell 14.4 per cent to A$291.9 million ($374.2m).
But APN expects expected net profits for 2009 to be "in line with market consensus of A$120 million, with almost all the shortfall against the 2008 year occurring in the first half".
APN Chief Executive Brendan Hopkins said 2008 had "produced the most challenging trading conditions that APN has faced as a listed company".
"Given the uncertainty in the broader marketplace and the economic factors affecting our clients, we believe annual Net Profit After Tax prior to exceptionals of A$140.1 million to be a satisfactory result," said Hopkins.
Revenues from NZ Regional publishing were A$117.9m for the year to the end of December, down 10.5 per cent from a year earlier.
Earnings before interest and tax (ebit) for NZ National were down 25.8 per cent to A$71.1m, while for NZ Regional ebit fell 32.8 per cent to A$20.4m.
APN News, 39.1 per cent owned by Irish newspaper Independent News & Media, made a net loss of A$24m.
That included exceptional items of A$164.1m including a non-cash impairment charge of A$146.8m relating to the New Zealand assets acquired as part of the Wilson & Horton acquisition in 2001.
Net profit before significant items was A$140.1m, a fall of 17 per cent.
Hopkins said the past year produced the most challenging trading conditions it had faced as a listed company.
The second half of 2008 was particularly challenging, with the New Zealand businesses facing a sharp slowdown in the local economy.
"As expected, this flowed through to our advertising revenues and required significant restructuring of our costs," said Hopkins.
"Costs in the New Zealand operations were down in local currency terms."
In this country, along with the Herald, APN's assets include the Herald on Sunday, nine regional daily titles, more than 30 community titles and New Zealand Magazines, as well as The Radio Network (TRN) and outdoor advertising operations.
Low business and consumer confidence in the face of the global financial crisis had reduced advertising spend across most categories in the National publishing unit in New Zealand, APN said.
"Reasonable" results were achieved in the fourth quarter through packaging of advertising across newspapers and magazines.
Efficiencies continued to be achieved through the outsourcing of production to a central facility in Auckland, with about 1000 pages a week now produced across all titles.
In New Zealand regional markets, economic conditions were subdued throughout the year.
Cost management was a key focus for the division, APN said.
Editorial production of individual regional titles was transferred to a single outsourced facility in Auckland, which had improved quality as well as reduced costs. Equally, marketing and logistics had been centralised to make better use of resources.
"The regional newspapers remain well placed to take advantage of any improvements in local economic conditions," the company said.
TRN had a difficult year, while the Outdoor operation saw challenging trading in 2008, with a particularly challenging fourth quarter.
Online, The New Zealand Herald website, nzherald.co.nz had generated a nearly 300 per cent increase in revenue and traffic in the past two years.
An unfranked final dividend of A12c a share was declared.
Hopkins said the second half of 2008 had been "particularly challenging".
"In Australia, despite attempts by the Federal Government to stimulate consumer demand, the gathering momentum of the global financial crisis affected the confidence of our customers.
"This resulted in a number of national advertisers electing not to proceed with planned campaigns. This particularly affected our Outdoor and Australian Publishing businesses in November and December."
Hopkins said APN's now completed restructuring and replanting programme "positions APN well for these difficult times.
"All material capital expenditure programs in connection with the restructuring are finalised and the vast majority of the one-off costs of restructuring are also behind us."
Total costs for the first quarter of fiscal 2009 would be seven per cent less than in the prior corresponding period.
Forward bookings in March were in line with expectations after a slow start to the year.
National and Retail advertising, which accounted for almost 80 per cent of total advertising revenues and almost 60 per cent in APN's publishing divisions, was "solid".
- Agencies
