SYDNEY, Feb 21 (Reuters) - Australian media group Fairfax Media Ltd reported a 39 percent fall in half-year profit on Thursday, slightly below analysts’ forecasts, and said it would continue to invest in its digital business and cut costs to cope with tough market conditions.
Last year, the struggling media company sold its profitable online venture, New Zealand’s Trade Me , and its agricultural publishing unit in the United States, to pay down debt.
Excluding the profit from business sales, Fairfax posted net profit of A$83 million ($85.1 million) in the six months to December 2012, compared with A$135.7 million a year earlier. The was slightly lower than the average forecast among four analysts for A$86.0 million.
“For some time we have considered it prudent to manage Fairfax Media on the basis that a significant cyclical upswing was unlikely in the near term,” Fairfax Chief Executive Greg Hywood said in a statement.
Fairfax shares were down 2.4 percent after the results announcement, versus a 0.8 percent fall in the broader market .
Fairfax, which publishes Australia’s oldest newspaper, the Sydney Morning Herald (SMH), said it would continue to invest in its digital business to cope with the transformation in the media industry.
“Audiences are increasingly looking to access our journalism through the new digital platforms. More than one million SMH and The Age iPad apps have now been downloaded,” Hywood said in the statement.
Fairfax wrote down the value of its newspaper titles by almost $3 billion last year, and said it would reduce costs by cutting 1,900 jobs over three years, closing printing plants and reducing the size of its broadsheet newspapers.
Its flagship broadsheet newspapers, the Sydney Morning Herald and the Age, will switch to tabloid formats in March.
Fairfax plans to outsource its contact centres and reduce its office size in Sydney and Melbourne, which would save A$29 million annually by 2015, Hywood said.
The company also said the tough market conditions would continue into the second half of 2013.
Fairfax publishes 400 metropolitan, regional and suburban newspapers and magazines and owns radio stations in Australia.
Mining magnate Gina Rinehart, the Asia-Pacific region’s richest woman, has a stake of around 15 percent in Fairfax but her attempts to gain a seat on the board have been rebuffed.
Smaller rival APN News & Media Ltd reported on Thursday a full-year profit of A$54 million, down from A$78.2 million a year earlier, blaming weak advertisement markets.
Shares in APN, which fell sharply after its chief executive, chairman and three independent directors quit this week over a fight with major shareholders, rose 3.7 percent on Thursday.
$1 = 0.9718 Australian dollars Reporting By Maggie Lu Yueyang; Editing by Chris Gallagher