Fairfax boosts profits despite further fall for publishing revenues

FairfaxFairfax has reported improved profits for the first six months of the financial year making $86.4m, and its first rise in earnings before interest, tax, depreciation and amortisation (EBITDA) since 2010.

The company has also sold FRG Asia, InvestSmart and Stayz over the period making $221m on the transactions, which equated to a profit of $178m when put with ordinary earnings. However, revenue for the first six months was down 1.2 per cent at $1.083bn.

Whilst the publishing unit reported a revenue decline of 7.1 per cent the EBITDA increased to $81.5m, up 52 per cent on the corresponding period last year, while property website Domain grew online revenue 33 per cent , while the Fairfax of the Future program is reported as delivering $260m of annualised savings so far.

However, radio revenues dropped 0.8 per cent in a market that grew 2.8 per cent last year, as flagship station 2UE struggled for ratings in Sydney.

CEO Greg Hywood said in statement this morning: “We have shown a determination to transform the business through cost reductions and driving new revenue streams. It is these strategies that underpin a half-year result that’s starkly at odds with the conventional wisdom that traditional media faces a bleak future simply because reductions in print advertising cannot be immediately offset by increases in digital revenue.

“We are running this business for profitability while improving the quality and depth of the content we produce. We have made decisions to balance revenue and cost with a focus on growing profits on a sustainable basis.”

By lunchtime, the company’s share price had risen as high as 91c on the ASX – its best performance in more than two years.


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