Fairfax reports whopping $2.7b loss after write-downs

In another worrying sign for the beleaguered media company, Fairfax has posted a net loss after tax of $2.7 billion for the last financial year, following a write-down of the value of its mastheads.

As the company's newspaper business continues to struggle in the face of economic downturn and major structural changes in print, Fairfax recorded an impairment charge of $2.8 billion on its mastheads, reflecting deterioration of revenue with no expectation of recovery.

In addition, the company has been hit by restructuring and redundancy charges of $200 million, due to major restructuring at the company.

Due to these charges, Fairfax's profit situation is considerably worse off than the loss of $390 million in the previous corresponding period, and the company reported its sales for the 2013 financial year were already down 10% on the previous year.

Meanwhile, revenue was down 6% to $2.3 billion, while EBITDA dropped 16.7% to $506 million.

The Metropolitan Media division saw advertising revenue drop 11.6%, while the Financial Review Group saw ad revenue decline 12.2%.

Ad revenue for Regional Media sunk 2.2% and declined 6.8% for New Zealand Media.

Fairfax chief Greg Hywood said: “These results reflect a challenging trading environment. We continue to drive significant change through the business, consistent with our strategy, and we are responding to a stressed economic environment.

“The cyclical downturn worsened during the 2012 financial year, while continuing structural change is affecting our Metro Media division. Fairfax has worked hard to respond to these conditions. At the half year we formally announced the Fairfax of the Future program to transform our business. We subsequently expanded and accelerated that process.

“Despite the tough times, Fairfax is a company that is committed to growth and committed to innovation.”

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