Fairfax shares fall as losses hit $A2.7b
Thu, 23 Aug 2012 1:28p.m.
Fairfax Media shares have dived more than five per cent after the company unveiled a $A2.73 billion ($NZ3.53b) loss for its 2011/12 financial year.
News of the massive loss came as chief executive Greg Hywood on Thursday said he would give up half his bonus because of the difficult conditions facing the company.
Fairfax's net loss for the year to June 24 blew out from the $A390.9 million deficit it reported for the previous financial year.
Revenue at the media group, which is undergoing a massive restructure and shedding hundreds of jobs, fell to $A2.33b from $A2.5b.
The profit result was hit by $A2.9b in writedowns. Stripping out those, underlying net profit fell to $212 million from $283 million a year earlier.
The value of the New Zealand mastheads, which include The Dominion Post and The Press, took a big hit, being written down to $A137.8m from $A733.5m, while New Zealand goodwill of $A5.9m was wiped out.
By contrast, online auction Trade Me's goodwill was bumped up in value to $A574m from $A559.3m, even though Fairfax sold down its stake.
Mr Hywood defended the result, saying the underlying performance showed that the company "has a sound and diversified business".
"These results reflect a challenging environment," he said in a statement.
Shares in Fairfax were three cents, or 5.3 per cent, weaker at A53.5 cents mid-morning on the ASX.
Fairfax said economic conditions remain challenging in core advertising markets and ongoing structural changes were affecting the metro newspaper business.
It said early 2012/13 revenues were tracking 10 per cent below 2011/12.
"Difficult trading conditions are likely to continue," the company's statement said.
The New Zealand media assets saw advertising fall 6.8 per cent and circulation 5.6 per cent, for a 5.8 per cent fall in sales to $A443.2 million.
Meanwhile, Mr Hywood volunteered to give up half the $A840,000 bonus previously approved by the Fairfax board.
The bonus was equal to 35 per cent of his maximum short-term incentive.
His total pay for the year was $A2.02 million.
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