Independent News & Media Plc (INM.L) reported Friday a loss for its first half, compared to prior year's profit, reflecting a significant one-time charge related to APN News & Media Limited, in which it is the largest shareholder, as well as lower revenues due to weak demand in Ireland. The Irish newspaper and media firm also provided fiscal 2011 profit forecast.
First-half pre-tax loss was 16.4 million euros ($23.66 million), compared to last year's profit of 21.4 million euros. The previous year's results have been restated due to the change in accounting treatment of APN.
The latest results included net exceptional charges of 40.1 million euros, mainly due to INM's share of APN's exceptional charge, primarily arising on the non-cash impairment of APN's New Zealand mastheads. The previous year's one-time gain was 9.5 million euros.
Adjusted pre-tax profit climbed to 23.7 million euros from 11.9 million euros last year.
Adjusted earnings attributable to equity holders of the parent increased 22.4 percent to 20.2 million euros from last year's 16.5 million euros, and adjusted earnings per share grew 12 percent to 3.7 euro cents from 3.3 euro cents a year earlier.
Half-yearly revenues fell 12.3 percent to 284.6 million euros from 324.5 million euros a year ago. The company attributed the decline to the disposal of London Independent titles and still weak domestic demand and spending in Ireland.
On an underlying basis, revenues in constant currency and excluding the disposed The Independent and Independent on Sunday titles in the UK, dropped 5 percent from last year.
Underlying advertising revenues, which represent 40 percent of total revenues, remained subdued and were down 7.3 percent, and underlying circulation revenues, which represent 29 percent of total revenues, fell 2.1 percent. However, underlying digital revenues grew 5.7 percent, with a number of strategic initiatives.
"Trading conditions, particularly in Ireland, remained very difficult and a significant increase in exports failed to translate into domestic demand. While exports continue to grow in Ireland, consumer uncertainty about the impact of austerity measures, taxes and the Euro zone debt crisis has led to a substantial increase in the rate of personal savings in Ireland," the company said in its statement.
For the period, EBITDA edged down 0.6 percent to 50.5 million euros, and adjusted operating profit fell 6.3 percent.
The company's net debt as of June 30 was 452 million euros, almost 17 percent less than it was 12 months ago.
Further, INM said its Directors do not propose recommending an interim dividend for 2011 and believe there is currently greater scope to create shareholder value through continued debt pay down.
Looking ahead, the company projects full-year 2011 operating profit in the range of 78 million euros to 83 million euros, with anticipated further improvement in market share and cost profile, even though short-term forecasting remains challenging.
The company noted that it does not anticipate any material advertising uplift or normalisation in advertising conditions before the year-end, as the general advertising conditions still remain tough and volatile.
Visibility has not improved since AGM in June and ongoing uncertainty over the response to the Euro zone debt crisis continues to constrain advertising and consumer spending, the company added.
INM.L closed Thursday's trading at 0.27 euros, up 0.01 euros or 3.85 percent.
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