News Corp has posted a profit of more than half a billion dollars but its Australian values dropped heavily, according to a filing to the US Securities and Exchange Commission.
The first earnings announcement since the split from the entertainment arm of the former News Corporation saw the new publishing company record a profit of $US506 million.
This was well up on its loss of $US2.07 billion last year, but News Corp’s Australian assets still struggled to maintain revenue.
Revenue for the company’s Australian mastheads declined by $US350 million; it also wrote down the value of its Australian newspaper assets by $1.4 billion.
The goodwill value attached to its newspaper assets around the world was also dramatically reduced, from $1.17 billion, to $317 million.
News Corp also spent $293 million on restructuring costs, a large chunk of which was spent in Australia and the UK.
In its report, News Corp put the results down to the difficult economic climate the newspaper industry is facing.
“These adjustments reflect adverse trends affecting the company’s news and information services segment, including declines in advertising revenue and continued declines in the economic environment in Australia, and resulted in a reduction in expected future cash flows,” the company said.
“Consequently, the company determined that the fair value of these reporting units had declined below their respective carrying values and recorded an impairment charge of approximately $1.4 billion ($1.1 billion, net of tax) in the fiscal year ended June 30, 2013
“In response to these challenging conditions the company has reorganised its Australian newspaper businesses, and the company recognised $293 million of restructuring charges in the year ended June 30, 2013, a significant portion of which resulted from its restructuring activities in Australia and the UK.”