Fairfax Media earnings slide with Domain posting greatest revenue growth
Fairfax Media has reported operating earnings of $145.1m for the six months ended December 31 – down 9.9% on the final six months of 2015 – with Domain continuing to be responsible for a majority of the publishing company’s earnings.
The company – which publishes The Sydney Morning Herald, The Age and The Australian Financial Review – posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $145.1m, down 9.9% from $161.1m, while revenue for the company was down 5.8% year-on-year from $958.1m to $902.9m.
Fairfax Media CEO Greg Hywood said: “For the half, the Fairfax Group delivered net profit of $84.7m, up 6% compared to year prior.
Two figures stand out. The 44% rise in Domain costs in digital and the 30% of Domain that is to “spin off”. The first is ridiculous. The second is bizarre.
One could easily conclude that Fairfax is in deep trouble, that Domain has big management issues and that Domain can’t actually float, so it isn’t.
I’m not clear on what you are saying?
There’s not a lot you can spin there with a double digit EBITDA decline in AMM (SMH, The Age, and AFR), and the same in Domain, previously the saving-grace-cash-cow. How did they manage to lose that much EBITDA out of Domain with that decline in revenue? Must be some issue with increasing costs – but what? That flash new office? Must be more than that!
Splitting Domain out is bizarre – they always talked about AMM being critical for the success of Domain in terms of promoting properties with ads and inserts etc etc.
It stands to reason that they don’t want the newspapers dragging down Domain’s value, so they are doing something now at the first sign of trouble in Domain.
RE digital subscribers, seems like they stagnated after year one and have struggled to step up since then. Sadly not a lot of value for Joe Blow who can just go incognito and not get the warnings. I quit my SMH subscription 2 years ago and I can still access the full tablet app! Quite amazing.