Fairfax posts $890m loss as publishing writedowns outweigh Domain’s gains

Fairfax Media has posted a $890m loss following a $1bn writedown of its flagship newspaper mastheads.

Fairfax chief executive Greg Hywood. Picture: Hollie Adams/The Australian.

Fairfax Media has posted an $893.5 million loss for fiscal year 2016, compared to a $83.2m profit last year, as the company wrote down the value of its newspapers, including The Sydney Morning Herald and The Age, by $1 billion.

Fairfax said its full-year underlying net profit dropped by 7.6 per cent to $132.5m, as its revenues slipped by 0.6 per cent to $1.83bn.

Underlying earnings before interest, tax, depreciation and amortisation were off by 1.4 per cent to $283.3m.

“Today’s result is proof that the transformation of Fairfax Media over recent years has succeeded,” Fairfax chief executive Greg Hywood said.

“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.

Fairfax separated the results of its high-flying property business Domain Group from its Australian metropolitan media division ahead of today’s result.

Domain’s revenue surged by 33 per cent, while its EBITDA was up by 40 per cent to $120m.

The metro media division which houses the SMH, The Age, The Australian Financial Review, digital ventures and events, saw its EBITDA plummet by 45 per cent, on a revenue drop of 5 per cent.

Mr Hywood said the division’s performance reflected “ongoing structural shifts in advertising spend and investment in growth areas, digital ventures and events.”

Fairfax’s Australian Community Media division, which includes The Land and the Canberra Times, saw its earnings drop by 10 per cent to $90m, as the company pulled $60m of costs out of the business to help offset revenue declines.

Mr Hywood said the company was “undertaking a review of ACM to develop initiatives and identify opportunities”, after The Australianrevealed Fairfax was considering selling the division.

Fairfax will pay a final dividend of 2c per share, which will see the company pay total dividends of 4c per share for the year.