News blames print ads for losses

News Corp half year results saw the company earning $2.12bn, down by $40m compared to the previous year’s results at $2.16bn.

The company says advertising revenues decreased 9 per cent, or 8 per cent excluding a $12m impact from negative foreign currency fluctuations, primarily due to weakness in the print advertising market.

Robert Thompson, CEO of News Corp says, “In the second quarter, we saw the efficiency of our strategic reinvestment and digital diversification. Both were evident in our significantly increased operating profitability in the quarter, despite continued headwinds in print advertising.

“Results were driven by strong performance at our Digital Real Estate Services segment and meaningful revenues at HarperCollins, along with appropriate and ongoing management of the cost base at our news mastheads.

Loss income from continuing operation was $219m, compared to $106m in the prior year. Loss includes $537m of non-cash impairments and write-downs – including on the value of its Australian mastheads – and a one-time gain of $120m due to cash proceeds from the sale of REA group’s European business.

[Related: News Corp encourages voluntary redundancies]

News and information services were lower by $97m or 7 per cent to $1.3bn from $1.4bn compared to the prior year. Adjusted revenues were 5 per cent lower compared to the prior year.

Circulation and subscription revenues decreased by 5 per cent by increased 1 per cent excluding a $28m impact from negative foreign currency fluctuations.

Segment EBITDA decreased by 10 per cent at $16m in the quarter, compared to the previous year, driven by lower advertising revenues. Book publishing revenues in the quarter increased by 4 per cent at $20m.

The digital real estate services revenue increased by $34m or 16 per cent, compared to the previous year. News Corp says, this is primarily due to the growth at REA group, Move, as well as $9m from the acquisitions of iProperty and Diakrit.  Digital revenues increased to 27 per cent of news and information services segment revenues, compares to 22 per cent in the prior year.

 “Our core platform has been bolstered by our rapid expansion in digital real estate, which is well on the way to becoming the largest contributor to our profitability. This segment posted another very strong quarter with a 16 per cent year-over-year revenue increase, improved margins and robust audience gains.”

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