Fairfax Media has lifted its first half underlying profit thanks to a 52 per cent jump in earnings from its core metropolitan media business.
The media group made an underlying profit of $93.1 million for the six months to December 31, up 12 per cent on $83.1 million a year ago.
The result was boosted by a 52 per cent increase in earnings from the metropolitan media business, which includes its major newspapers and websites like the Sydney Morning Herald and The Age, along with its Domain real estate business.
The company’s statutory net profit was down almost 50 per cent to $194 million, from $386 million a year ago.
Those figures included a $311 million profit in the prior period from its stake in New Zealand classifieds business TradeMe, which it has since sold.
They also includes a $100 million profit in the latest half from the sale of accommodation booking wesbite Stayz and its FRG Asia and InvestSMART.
Chief executive Greg Hywood said the underlying result vindicated the company’s strategy for transforming its business, which has suffered due to declining revenues from its traditional newspaper operations.
“We have shown a determination to transform the business through cost reductions and driving new revenue streams,” he said.
“It is these strategies that underpin a half-year result that’s starkly at odds with the conventional wisdom that traditional media companies face a bleak future simply because reductions in print advertising cannot be immediately offset by increases in digital revenue.”
The metropolitan media business recorded pre-tax earnings of $81.5 million for the half, more than double what they were a year ago, thanks to a 9.6 per cent increase in circulation from its publishing business and a 33 per cent rise in earnings from Domain.
But revenues from the company’s community, regional and agricultural titles were down more than 12 per cent, which Hywood attributed to difficult economic conditions resulting from drought in the eastern states, weaker employment and a fall in federal government and national brand advertising.
Revenues from Fairfax’s New Zealand business were down 4.3 per cent while advertising revenue from its Australian metropolitan radio business fell 0.8 per cent.
The company said total revenues were down three per cent in the first five weeks of 2014, compared to the same time last year, which is an improvement on the 5.5 per cent like-for-like slide recorded a year ago.
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