First-half losses of over €150m posted

INDEPENDENT NEWS Media made a loss of €152.3 million in the first six months of this year due to hefty impairment charges on its assets and other exceptional costs.

This compared with a loss of €17.7 million in the same period of 2011.

At a trading level, the media group’s operating profit, before exceptional items, fell 26.4 per cent to €25.4 million.

In spite of this decline, chief executive Vincent Crowley said the company was “very solidly profitable”.

Revenue declined 4.4 per cent to €272.2 million.

The company’s earnings before interest, tax, depreciation and amortisation fell 22.6 per cent to €39.1 million.

INM was cautious about the outlook for the second half of the year. It said early trading in the period suggested a “continuation of the trends” experienced in the first half of the year.

“Forecasting operational performance for the latter half of 2012 is challenging, as visibility is very short-term,” Mr Crowley said.

INM reduced its operating costs by €3.3 million in the first six months. This included the closure of its head office in Citywest and an office in London, voluntary redundancies at the Sunday World and the ending of a day shift at its Belfast printing plant. Also, the role of chief operating officer was not “back-filled” after Mr Crowley was promoted from that role to chief executive following the resignation of Gavin O’Reilly.

The largest cost increase experienced by the group in the six months was a €2 million rise in salaries due to wage inflation in South Africa. A pay freeze is in operation in Ireland.

INM incurred net exceptional charges of €163.7 million in the six-month period. This included a €99.3 million non-cash impairment charge on intangible assets at its APN associate, for mastheads in New Zealand.

The cash charge in the exceptional items amounts to €10.7 million.

INM’s advertising revenue declined 6.9 per cent to €106.5 million, while circulation revenue was down 3.3 per cent at €80.4 million.

Other income declined 2.1 per cent to €85.3 million.

In Ireland, advertising revenue fell 8.1 per cent, while South Africa was down 5.9 per cent.

In terms of circulation, revenue in Ireland declined 2.4 per cent while in South Africa it was down 5.4 per cent.

Digital revenue grew 15.2 per cent to €5.3 million. The company said this was partly due to the rollout of GrabOne in Ireland, an e-tailing brand.

It is due to increase its shareholding in CarsIreland.iefrom 33.3 per cent currently up to 50 per cent by the end of this year.

INM said it plans to begin charging for its online content in Ireland in the first half of 2013.

Mr Crowley said INM was also focusing on resolving the €163 million deficit in its defined benefit pension scheme.

He said a “number of options” were being considered, including the new sovereign annuity bonds being sold by the National Treasury Management Agency.