APN cuts 100 more jobs, downsizes more papers to 'compact'

BUSINESSDESK: Another 100 jobs are to go at APN New & Media, all its regional papers are to be made "compact" and the value of its metropolitan mastheads, including the New Zealand Herald, will be written down by nearly $480 million.

The company, which also publishes the Listener and New Zealand Woman's Weekly, tripled its first-half loss after writing down the value of its New Zealand publishing assets unit by $A485 million as part of an ongoing review.

The net loss widened to $A319.4 million, or 49.9 cents per share, in the six months ended June 30 from a loss of $A98.3 million, or 16.1 cents per share, a year earlier, the Sydney-based company says.

Revenue from continuing operations rose 1% to $A405.5 million. Earnings before interest, tax, depreciation and amortisation fell 12% to $A74.9 million.

APN warned its second-half profit may be impacted by deteriorating publishing revenues on both sides of the Tasman, and the partial sale of its outdoor advertising unit.

The bulk of the impairment charge was on New Zealand mastheads, with kiwi metros written down by $A370.3 million ($NZ479.6 million), regionals by $A83.7 million and magazines by $A31 million. That leaves the carrying value of intangible assets in New Zealand at $200.4 million.

"It has been a tough first half for our publishing businesses, particularly in New Zealand," chief executive Brett Chenoweth says. "Our publishing divisions have undertaken substantial work to reduce our cost base and to rejuvenate our products to adapt to a changing media context. We have accelerated these reforms."

APN's board declared a partially franked first-half dividend of 1.5 Australian cents per share, down from 5 Australian cents a year earlier. The dual-listed shares were unchanged at 60 cents on the NZX, having shed 35% this year.

At its May annual meeting, the media group told shareholders it had appointed Deutsche Bank to undertake a strategic review of the New Zealand media assets after receiving approaches from parties interested to buy. The review is still under way, APN said today.

More cuts were flagged for the New Zealand media unit, with another 100 jobs to go this year on top of the 400 eliminated in the past three years, along with more centralised and outsourced production models.

Other cost-cutting measures under review include cutting the number of publishing days for some regional New Zealand titles, which include the Hawkes Bay Today, the Bay of Plenty Times, Wanganui Chronicle and Christchurch Star.

The company says it is in dispute with Inland Revenue over $41 million of tax for 2011. IRD is seeking to impose penalties of 10% to 50% of the tax in dispute in addition to the tax claimed, according to the notes for APN’s accounts.

APN's Australian regional media business reported a 7% fall in first-half sales to $A125.2 million, for a 9% fall in ebitda to $A21.12 million, while the New Zealand media group saw a 3% fall in revenue to $A141 million, with a 20% decline in earnings to $A21.7 million.

Australian Radio Network lifted sales 8% to $A68.1 million, with an 11% boost to ebitda of $A23.8 million, while the Radio Network unit in New Zealand, whose stable includes NewstalkZB and 91ZM, increased sales 3% to $A41.7 million, while ebitda fell 6% to $A6.5 million.

APN Outdoor sales fell 26% to $A89.8 million, with a 29% fall in earnings to $A11.5 million, reflecting the group's decision to sell half of the advertising business to Quadrant Private Equity.