INDEPENDENT NEWS & Media (INM) returned to the black last year in spite of a sharp decline in advertising revenue in Ireland.

INM posted an after-tax profit of €111.9 million for 2010, a significant turnaround on the €41.1 million loss in the previous year when the company underwent a major financial restructuring.

Revenues declined to €626.4 million from €689.7 million in 2009.

This reduction reflects the disposal of a number of assets, notably Outdoor in South Africa and the Independentnewspaper titles in London. When the effect of these transactions is stripped out, INM said its revenues rose by 3.3 per cent to €605.3 million.

INM’s results were restated to reflect the deconsolidation of APN News Media Ltd, in which it owns 31.6 per cent.

APN was previously regarded as a subsidiary due to INM’s majority presence on the Australasian company’s board of directors. Changes to the APN board at the end of 2010 meant INM no longer constituted the majority of the board. As a result, its status changed to that of an associate of INM and prompted a change to its accounting treatment.

Had APN not been deconsolidated, INM would have reported revenues of €1.33 billion and an after-tax profit of €114.6 million.

As a result of the significant changes to the INM business over the past two years, its revenues are now sourced from the island of Ireland and from South Africa.

Revenues in Ireland declined to €399.1 million from €414.1 million while its operating profit here was flat last year at €53.9 million.

INM said advertising revenues in Ireland declined by 12.5 per cent in 2010, as the recession continued to weigh on its business.

Commenting on INM’s trading in the first quarter of 2011, Gavin O’Reilly, the company’s chief executive, said advertising revenue is down 7 per cent year to date while circulation income has reduced by 1 per cent. “There’s a very tough macro environment out there,” he added.

Mr O’Reilly said all of its titles in Ireland are profitable.

It recently placed the Sunday Tribune, where it owned just under 30 per cent of the shares, into receivership, while a decision was also taken to close the Irish Daily Star Sunday, in which INM was a 50 per cent shareholder.

Revenues from South Africa fell by 1.6 per cent last year to €206.2 million. Its operating profit there fell by 9 per cent to €43.5 million.

INM shaved €100.2 million from its net debt in 2010 to leave it with borrowings of €473.6 million. Mr O’Reilly said its focus is to continue to deleverage the business by reducing its net debt to Ebitda ratio to a multiple below three times. It stood at 4.1 times at the end of 2010.

Donal Buggy, INM’s chief financial officer, said it would have an average debt of €450 million this year.

This will attract an average interest rate of 7.5 per cent and result in an interest bill of €34-35 million.

INM’s shares closed unchanged in Dublin yesterday at 59 cent.

INM: 2010 results*

Revenue: €626.4m (€689.7m)

Operating profit/loss: €49.9m (-€68.1m)

Profit/loss after tax: €111.9m (-€41.1m)

Net debt: €473.6m (-17.5 per cent)

*Results represent deconsolidation of APN News Media Ltd, which was previously treated as a subsidiary. It is now classed as an associate.