At the Reuters Tech Summit, Trulia chief executive Pete Flint says private equity investors are starting to pull back from buying U.S. real estate, while overseas buyers are coming on strong once again. Video
- Special Report: Syria's Islamists seize control as moderates dither
- Angelina Jolie stunt double sues News Corp over hacking
- Global shares firm, dollar steady before Fed decision
- Kanye West wins over critics with 'daring' new album 'Yeezus'
- Journalist who brought down U.S. general is killed in Los Angeles car crash
Australia's Fairfax slashes newspaper values by almost $3 billion
MELBOURNE (Reuters) - Australian publisher Fairfax Media (FXJ.AX) slashed the value of its newspaper titles by almost $3 billion on Thursday, as it posted a steep fall in profit and said it saw no early turnaround in the worst advertising conditions in more than 30 years.
Shares in Fairfax slumped 10 percent to A$0.51, just off an all-time low hit earlier this month, as the publisher of the Sydney Morning Herald, Australia's oldest newspaper, as well as the Australian Financial Review and The Age, warned sales in the new year were running 10 percent below a year ago.
Hours after the results, top shareholder Gina Rinehart, Asia's richest woman, was offering to sell around 117 million shares, or 5 percent of the company, at A$0.50 a share, a source with knowledge of the sale said.
Rinehart, a mining magnate with a fortune estimated by Forbes at more than $18 billion, had already cut her stake to about 15 percent in July after a bitter and public feud with the board over representation and editorial independence.
Fairfax joined newspapers around the world in writing down the value of its mastheads to reflect a massive shift online by readers.
The company is already shedding almost a fifth of its staff as classified ad revenues collapse in the face of online competition for real estate, job and car advertisements.
"I have been in this industry since the late 1970s and I have never seen an advertising environment of the type we are currently experiencing," Fairfax Chief Executive Greg Hywood told a conference call.
"We are managing Fairfax Media with no expectation of an early recovery," he said. "Difficult trading conditions are likely to continue."
The publisher said its outlook worsened considerably since January.
The number of people reading a newspaper once a week had dropped to 64 percent from 80 percent since 2007, Hywood said, while revenue at The Age, the Sydney Morning Herald and the classified ads business fell 17 percent in the year.
"It's no longer the traditional newspaper and media companies who have a monopoly," said University of Melbourne media analyst Andrea Carson.
"Fairfax is doing what it can ... but the long terms trends do not bode well for it," she said.
Fairfax wrote down the value of its newspaper titles and goodwill by A$2.8 billion ($2.9 billion), just weeks after local newspaper rival, Rupert Murdoch's News Corp, took a $2.85 billion non-cash restructuring and impairment charge, related mainly to the value of its Australian newspapers.
Shares in Fairfax which have tumbled nearly 90 percent over the past five years, recorded their biggest one-day percentage fall in three-and-a-half years.
"People had expected writedowns. It's a little higher than anticipated though," said Angus Gluskie, portfolio manager direct, White Funds management.
"The outlook comment ... doesn't look strong," he said.
Fairfax publishes 400 metropolitan, regional and suburban newspapers and magazines, according to its web site, and also owns radio stations and the country's top dating web site, RSVP.com.au.
The group posted a 36 percent fall in underlying net profit to A$69.7 million in the six months to June 24, according to calculations by Reuters, in line with forecasts but down from A$108.4 million a year earlier. ($1 = 0.9576 Australian dollars)
(Editing by Richard Pullin)
- Tweet this
- Share this
- Digg this