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Fairfax Media joins News Corp with real estate as bigger profit source than news

Both of Australia’s major publishers now make more of their profits from real estate than they do from their news businesses, new numbers today confirmed.

Today’s numbers to the ASX from Fairfax Media split out real estate brand Domain’s performance from its metro division for the first time.

They show that overall the company made an underlying profit of $132.5m, down 7.6% per cent on the previous year.

Fairfax media logoThose figures show Domain earnings before interest and tax (EBIT) represented more than half of the profits for the whole company, with the online classified website recording EBIT of $107.3m up from $80.9m last year. The whole company’s EBIT number was $213.2m.

That figure dwarfed other divisions. Fairfax’s metro division – which publishes masteahds including the SMH and The Age, posted $13.8m in earnings, down from $30.5m last year. Community Media recorded $74.3m profits, down from $77.4m. New Zealand Media was $43.3m, down from $54.2m and Radio was up to $22.3m from $11m.

Fairfax EBITFairfax posted a net loss after tax of $893.5m, following a $1.026m write down announced last week where it also revealed that for the first time it would be splitting out Domain’s numbers in today’s announcement.

Earlier this week, rival News Corp revealed that its $344m profits from its digital real estate operation around the world now outstripped its $214m profits from news and information services. However, News Corp’s $5.3bn overall global revenues from news operations still outstrip the $822m real estate turnover.

Revenues within Fairfax across the group were down 2% to $1.8bn with an overall earnings before interest, tax, depreciation and amortisation (EBITDA) of $283.3m down 1.4%.

Greg Hywood, CEO of Fairfax Media, said in a ststaement: “Today’s result is proof that the transformation of Fairfax Media over recent years has succeeded. The stable top-line revenue and EBITDA make it clear that we have reshaped this company into a high-value, broadly based, digital rich business.

“Digital and non-print earnings now constitute more than 40% of Fairfax’s EBITDA. On current trends, next year this will be closer to 60%, reflecting the continued growth in digital and non-print earnings.”

“We are delivering a higher quality of earnings from our more valuable segments – including Domain, digital publishing and events. This single fact underlines the extent of the transformation of the business in recent years.”

Hywood: the seven day print cycle is coming to an end.

Hywood: the seven day print cycle is coming to an end.

Hywood also continued to telegraph that the end of printing weekday newspapers is imminent, stating: “For our Australian Metro Media titles The Sydney Morning Herald and The Age it should surprise no one, and certainly not us, that the seven-day-a-week model will eventually give way to weekend only, or more targeted printing in the case of The Australian Financial Review.

“This trend is already occurring globally. Exactly when we move towards implementing this new model depends on the view we form about trends in consumer and advertiser behaviour.”

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