14 Dec 2012

APN warns tough market conditions will hit profit

6:45 pm on 14 December 2012

Shares in APN News and Media have returned to year lows - falling 2 cents to 36 cents each (down 5.26%) - after warning weaker advertising revenues will hit its profit.

The trans-Tasman media company, which owns the New Zealand Herald daily paper, regional dailies and the Listener magazine, says its publishing revenue has fallen by a tenth in the second half of the year.

It says that weaker advertising revenue hit its profit levels, though cost savings have offset some of the decline.

The company forecasts a profit before one-off items of between $51 million and $54 million, compared with a $78 million profit the previous year.

Like other publishers, APN has struggled with a downturn in advertising and shift in readership to the internet where the returns are not as profitable.

The Australasian media company said its publishing revenue had fallen by 10% in the second half of the year.

In New Zealand, APN expects advertising revenue to fall 9%, with much of that due to declines in display and employment ads.

The media group predicts its Australasian publishing arm will produce gross earnings of between $A84 - $A87 million this year.

In contrast, the group's advertisiing unit Adshel, radio network and daily discount website GrabOne are performing strongly, and total earnings are expected to be $150 million - $155 million.

APN also owns the New Zealand Women's Weekly, and has a stake in The Radio Network, as well as some Australian newspapers.