An 11% decline in ad revenue and a softer property market contributed to a fall in News Corp revenue in Q1.
The group has reported a 2.4% fall in revenue in its Q1 earnings report. Revenue was $1.97 billion, down from $2.01bn in Q1 last year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 20% year on year to $130 million. And the publisher reported a loss of $15m – compared with profit of $175m in 2015.
Its news and Information business, which includes its newspaper division, reported a 5% fall in revenue to $1.22bn and an 11% decline in ad revenue due to weak print ad sales. EBITDA for the division fell 45% to $46m.
Digital now accounts for a quarter (24%) of its News segment revenue, up from 20% for the same period a year ago.
Circulation revenue increased 1% (excluding the impact of foreign currency) due to increased prices in Australia and the UK and higher priced digital subscriptions.
Digital subscriber numbers in Australia were up 15% year-on-year reaching 283,000.
Robert Thomson, News Corp global CEO said print advertising challenges were “partially offset” by digital gains and cost-cutting initiatives.
“We continue to push digital … while we invest in high quality, premium content balanced with ongoing cost cutting measures.” he added.
Meanwhile REA Group, its property arm, has reported a 16% rise in revenue – boosted by the inclusion of iProperty revenue, which was not included in the year on year comparable period. It does not split out the organic growth excluding the acquisition of the south east Asian property group which it completed in February this year.
For the quarter ending 30 September, REA's revenue reached $170m, EBITDA from operations was $90m - a 9% increase.
The listings market saw an 8% decline in volumes during the period and the group warns it expects the soft market to continue.
Operating expenditure increased as REA invested more in marketing and consolidated the iProperty business – the increase in spend is expected to continue into Q2. Cash flow also decreased as the business invested in talent and innovation.
Tracey Fellows, CEO of REA Group, who appears on the AdNews Power 50 List published this week, says: “This has been a strong first quarter for REA Group given the softer conditions in Australia. Our focus on continuously improving consumer experience and creating value for our customers saw us deliver an increase in depth revenue.”
It claims visits to the site exceed its nearest competitor 2.3 times and visitors spend 7.5 times more time on the site than any other property site in Australia.
Ceasing Presto operations earlier last month resulted in equity losses of $15m in Q1. Foxtel's net income declined to $16m down from $42m a year ago – primarily due to the $21m loss from closing Presto, according to the earnings report.
Foxtel's EBITDA increased from $140m to $143m, while operating income for the three month period was $91m, up from $85m in 2015.
Churn increased to 15% up from 10% in the period with approximately 2.9 million subscribers.
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