Total revenue declines to $1.83bn, while profits from the Sydney Morning Herald and the Age fall by 45%

This article is more than 4 years old

This article is more than 4 years old

The publisher of the Sydney Morning Herald and The Age, Fairfax Media, has posted a full-year net loss of $893.5m compared with an $82m profit last year after announcing a close to $1bn write-down of assets last week.

The media company, which now makes 50% of its profits from online property business Domain, last week separated the profitable website from its struggling newspaper division.

Total revenue also declined in the 12 months to 26 June, to $1.83bn, from $1.87bn the previous year, while net operating profit fell 7.6% to $132m.

Fairfax announces billion-dollar write-down and plan to split off Domain Read more

Despite an increase in pre-tax profits at Domain and a 20% growth in group digital revenue, Fairfax was hindered by the continued poor performance of its flagship mastheads.

Profits in its metro division, which houses the Canberra Times as well as the Herald and The Age, fell nearly 45% to $39m, while profits at local and regional newspapers fell 10% to $110.9m.

There are 209,000 paid digital subscribers to the SMH, the Age and the Australian Financial Review, accounting for $38m but it is not enough to offset the losses on the newspapers.

With print circulation revenue and print advertising revenue both declining Fairfax CEO Greg Hywood confirmed it was only a matter of time before the Monday to Friday editions of the metropolitan papers ceased publication in line with global trends.

The national six-day-a-week Australian Financial Review would move to a “targeted printing” schedule, he said.

“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,” Hywood said.

“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.”

But after a torrid year which saw a strike by journalists in protest at forced redundancies Hywood was keen to emphasise the positive contribution of Domain and other digital businesses to the bottom line.

Hywood talked up his transformation of Fairfax Media into a sustainable publishing model which has seen the company significantly reduce its editorial workforce, laying off hundreds of journalists, artists and photographers in recent years.

In a worrying trend smh.com.au fell into third place in the Nielsen online news rankings in June, as the ABC News website soared into second place for the first time and news.com.au took top spot.

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

“The stable top-line revenue and ebitda [earnings before interest, tax, depreciation and amortisation] 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 nonprint 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.”