West Australian Newspapers post net profit down but outlook positive

Posted by Erina Lin on February 17, 2010 at 3:34 PM

West Australian Newspapers (WAN) Monday announced a A$49.5 million net profit for the six months to December 31, 2009. It went down 15.4 percent compared to the previous period, mostly due to advertising downturn at its flagship title, The Australian reported.

Chris Wharton, chief executive of WAN, however, said the final two months of the first half was strong due to "improvement in all major ad categories and a strong local economy."

"Although we can't say what the future holds, in 2009 WAN hit the bottom, rumbled along for about six months and then started to see some positive trends," he said. "By December 2009, we were basically back to 2008 pre-crash levels."

WAN also announced a better-than-expected 19c fully franked interim dividend payable on March 31, although its stock price ended 33c lower at $7.17 Monday, The Australian reported.

"The company's stated dividend policy is to pay the maximum appropriate dividend, having regard to the company's debt and capital management requirement," said Wharton.

Industry analysts said the market had already factored in strong earnings growth for the later half of fiscal year 2010. "Overall, (it is) likely to have met market expectations, and good sequential gains should garner a reasonable response. Having said that, on face value it does not look like it will result in material earnings upside," according to Deutsche Bank.

The company had its earnings before interest, tax, deprecation and amortisation down 13.9 percent to $88.6 million. Revenue decreased 9.7 percent to $204.9 million.