SYDNEY - Fairfax Media has forecast a 27 per cent drop in full-year profit and frozen executive salaries because of its concerns that the advertising downturn shows no sign of recovery.
But the newspaper publisher said cost-cutting and a resilient performance from its divisions had cushioned the effect of a
decline in advertising revenue.
Fairfax, which merged with Rural Press in 2007, said it expected to report underlying earnings before depreciation, interest and tax of about A$600 million ($758 million) for its full fiscal year.
This compares with A$818.3 million in the previous corresponding period to June 30.
"In the weeks since Easter, a clearer picture has emerged in relation to trading conditions in advertising markets in both Australia and New Zealand," chief executive Brian McCarthy said yesterday.
"It is apparent the markets have continued to deteriorate and, although the rate of deterioration has abated, advertising levels are not expected to show any marked improvement at least for the rest of this financial year."
Fairfax's New Zealand assets include newspapers the Dominion Post and the Press and the Trade Me website.
McCarthy said management was focused on further cost cutting.
"For the second half to date, total costs are approximately 10 per cent lower than for the previous corresponding period," he said.
"Consistent with these reductions, the CEO, directors and generally direct reports to the CEO, have accepted fee and salary freezes," he said.
"Demonstrating the benefits of the company's diversification programme, a more resilient performance from regional publishing, broadcasting and digital businesses has reduced the impact of more significant advertising declines in the metropolitan publishing business," McCarthy said.
Last year, Fairfax booked a 46.8 per cent increase in net profit to A$386.9 million, up from A$263.51 million in the prior corresponding period.
The merged group publishes 240 regional, rural and community publications.
Fairfax shares closed down one cent at A$1.12.
- AAP
