APN downgrades annual profit forecast

APN chief executive Brett Chenoweth, downgrading profit forecasts for the company today, said the digital culture across the group was building. Photo / supplied

APN News & Media has downgraded its profit forecast for calendar 2011 citing weakness in advertising markets in Australia and New Zealand as well as the natural disasters which hit its first half results.

APN, which owns The New Zealand Herald and nzherald.co.nz now expects net profit for the year will be between A$75 million and A$77 million which is said is slightly below current market consensus.

The near 5 per cent depreciation of the New Zealand dollar since August has also dragged down the result, it said.

It expects earnings before interest and tax (EBIT) will be between A$171 million and A$173 million.

In August, after reporting a 24 per cent drop in first-half EBIT to A$66.5 million, APN said it expected second-half EBIT would be flat at A$118 million, implying full-year EBIT would be A$184.5 million.

"Whilst our markets have been tougher than we would have liked this half, we have made material progress in repositioning APN and remain focused on managing the levers that are within our control," chief executive Brett Chenoweth said in a statement.

APN has gained market share in outdoor advertising and in its Australian and New Zealand radio businesses which are well-positioned for further growth in 2012, Chenoweth said.

"Our emerging digital businesses GrabOne and CC Media are beginning to contribute meaningful digital revenue streams for APN and the digital culture across the group is building," he said.

"Our cost management is vigilant and we have exceeded the cost reduction targets announced to the market in April."

Conditions affecting the publishing business remain "challenging."

APN also owns other newspapers and magazines in New Zealand including The Listener and holds a stake in The Radio Network, which claims a little over 48 per cent of New Zealand's radio market with stations such as NewstalkZB and 91ZM.

On the NZX, APN shares closed at 98 cents on Friday, just above their 97 cent record low since the shares began trading on NZX in mid-2004. The shares have fallen from as high at NZ$7.16 in November 2006 and from NZ$2.58 a year ago.