Australian publishing giant Fairfax posted a full-year net loss of $390.9 million on writedowns on its mastheads, but backed its strategy to weather current tough conditions.
The slump for Fairfax Media, which owns The Sydney Morning Herald, Melbourne's The Age and The Australian Financial Review, compares with last year's profit of Aus$282.1 million.
Fairfax has faced sliding advertising revenues and falling readership for its national and capital city papers, and in May announced a restructure that will see sub-editing duties no longer carried out in house.
"Fairfax Media is aggressively responding to structural changes in the media landscape while also dealing with the challenges of a prolonged cyclical downturn," chief executive Greg Hywood said.
"We have the right strategy and are working to build long-term shareholder value. Our focus is on improving operating performance and growing long-term sustainable earnings."
Hywood said while the company had reported a loss, this was due to substantial impairment and restructuring charges.
Fairfax wrote down the value of mastheads, customer relationships and goodwill by $650.7 million after reviewing the intangibles on the balance sheet, while restructuring costs totalled $23.9 million.
Underlying net profit was down 2.3 percent to $283.8 million for the financial year ending June 2011 while revenue of $2.5 billion was broadly in line with last year.
The company said market conditions were challenging, with advertising and other revenue increasing by more than five percent in the six months to December, only to reverse in the second half on subdued consumer confidence.
Circulation revenues were down 5.3 percent on last year.
Nevertheless, Fairfax said the trading year to date had shown some improvement.
"Advertising revenues are down four percent compared to last year, and appear to be stabilising from the last quarter of the 2011 financial year when advertising revenues were down six percent," the firm said.
"Visibility in advertising markets still remains opaque and general economic trends do not give us confidence that we will see any significant rebound in revenues in the current half."
Fairfax, which dominates Australian newspapers along with Rupert Murdoch's News Ltd, owns websites, newspapers and radio stations in Australia and New Zealand and there has been speculation that it will sell its radio assets.
The chief executive, who hopes to reduce costs by at least $85 million over the next two years, also confirmed Fairfax was in talks with News Limited to share print and distribution costs.
Fairfax shares climbed 7.1 percent on the result to 83 cents.
Hywood added the company's multi-platform strategy was delivering results.
"We are seeing the benefit of the diversity of operations, and the strong growth in digital earnings is providing some insulation as we manage changes in our metropolitan media business," he said.
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