Fairfax Media will write down its publishing assets by $989 million as part of its decision to report its Domain Group financials separately.
Domain, its real estate division, will now report separately to Australian Metro Media, which covers Fairfax’s metro and national news brands, digital ventures and events business.
Fairfax chief executive Greg Hywood said Metro’s new reporting structure would provide a clearer picture of operational performance as the business transforms to “a new sustainable publishing model”.
Fairfax’s latest half year results, posted in February, showed Domain’s soaring revenues helped drive profit across the company; Domain’s digital revenues were up by 37 per while print was up 148 per cent.
Mr Hywood, appeared to quell speculation that Domain would be sold or spun off as a separate entity.
He said Domain remained an integral and growing part of Fairfax and that “we have no plans for that to change”.
“We continue to invest in Domain to make it stronger and extend its business model beyond listings to capture the immense opportunity in the broader real estate ecosystem,” Mr Hywood said.
The write down and reporting changes will be reflected in Fairfax’s full year results to be published on August 10.
Of the almost $1b write-down of Fairfax’s publishing assets, $484.9 will be recorded for Australian Metro Media, $408.8 million for Australian Community Media and $95.3 million for its New Zealand assets.
“The Australian Metro Media adjustments reflect the market realities that the Metro business is facing and the change to segment reporting. The considerable work done to transform the publishing business has created flexibility and optionality around the future, and we are confident in our plans to transition to our new sustainable publishing model,” Mr Hywood said.
Fairfax recently introduced a new editorial structure for its flagship mastheads The Age and Sydney Morning Herald and foreshadowed an end to their seven-day-a-week print publishing model.
Fairfax said the New Zealand impairment would not take into account any potential benefit from the proposed merger between Fairfax Media NZ and NZME, nor would it affect the proposed transaction or its structure.
The company also said the impairments would not affect Fairfax’s ability to pay future dividends and are non-cash and would not impact banking covenants.
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