Fairfax writes down newspaper assets by nearly $1 billion, separates Domain Group – The Sydney Morning Herald

Fairfax Media will create a separate reporting segment for the highly profitable Domain Group, and has also written down the value of its Australian and New Zealand media divisions by nearly $1 billion. 

Creating a separate business for Domain demonstrates exactly how much revenue the online real estate business makes. Separating the financials could also be seen as a precursor to Fairfax selling Domain, or the newspapers.

Fairfax Media chief executive Greg Hywood.
Fairfax Media chief executive Greg Hywood.  

Until now Domain’s results were included in the Australian Metro Media [AMM] segment, which includes Fairfax Events and Digital Ventures, and newspapers such as The Age, The Sydney Morning Herald, and the Australian Financial Review. 

“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,” Fairfax Media chief executive Greg Hywood said through a statement to the stock exchange on Monday morning. 

“The new segment presentation for Metro provides a clearer picture of the operational performance of the business as it transitions to a new sustainable publishing model over time.” 

Fairfax released historical financial results for the stand alone Domain Group showing its revenues and earnings grew 45 per cent between mid-2013 and mid 2015. In the 2014-15 financial year Domain Group had the second-highest earnings in Fairfax Media with $86 million. Australian Community Media segment reporting $101 million, and the metropolitan newspapers division $71 million. 

Fairfax has also revealed it expects to book a non-cash post-tax impairment charge of $922.7 million after re-valuing the metro media segment, Australian Community Media [ACM], and New Zealand publishing business. 

An impairment of $485 million will be recorded against the metro media business, $409 million against the community newspaper business, and $95 million against New Zealand publishing businesses. 

“The Australian Metro Media adjustments reflect the market reality that the Metro business is facing and the change to segment reporting,” Mr Hywood explained. 

Fairfax Media reports its full year results on August 10. Its shares recently reached 12-month highs of $1.06. 

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