INDEPENDENT NEWS & Media’s Sydney-based associate, APN News & Media, yesterday reported a steep decline in profitability for 2008 after experiencing what it described as “the most challenging trading conditions” it has faced since becoming a listed company.
APN’s net profit after tax and before exceptional items declined by 17.3 per cent year on year to 140.1 million Australian dollars (€71.4 million).
Its trading revenue was down 4.5 per cent to A$1.226 billion.
The media group also trimmed its full-year dividend payment by 29 per cent to 22.5 cents.
This will affect the payout to Sir Anthony O’Reilly’s Independent News Media (INM), which owns 39.1 per cent of APN.
APN said the reduction in its dividend reflected “prudent capital management in the current market” and brought the company into line “with a more conventional payout ratio”.
APN owns a large number of newspapers titles in Australia and New Zealand. It also has a portfolio of radio stations and is involved in outdoor advertising and online media. Its activities stretch into parts of Asia.
INM sought a buyer for its stake in APN late last year as part of a exercise to raise much-needed cash to offset upcoming debt obligations.
On January 27th, INM said it had decided to retain its stake in APN, which it has held for more than 20 years. Industry sources speculated that INM had failed to attract bids of a sufficient level.
APN, which is led by Irishman Brendan Hopkins, described the second half of 2008 as “particularly challenging”. Its businesses in New Zealand “faced a sharp downturn in the local economy” and it required “significant restructuring of our costs”.
In a conference call with analysts, Mr Hopkins said January and February this year had been “slow”, but added that group costs were down by 7 per cent year on year.
Exceptional costs of A$164.1 million included a A$146.8 million impairment charge relating to assets acquired in 2001 as part of its acquisition of Wilson Horton in New Zealand.
In terms of funding, APN said it had access to cash and undrawn credit lines of almost A$100 million.
Last year, the company extended A$330 million in maturing debt from 2010 to 2011.
“Since the end of the year, a further A$50 million in maturities were also extended to 2011,” APN said.
Less than 25 per cent of its loans mature within the next two years, with no “material maturities” until December 2009.
“Planning for these maturities has commenced and APN is confident that extensions or alternative arrangements will be concluded well in advance,” the media group added.
