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Category: Business, Economics and Finance / Company News / Media

Fairfax to book nearly $1b in write-downs, hints of Domain split

Monday, 1 Aug 2016 09:49:15 | Thuy Ong

Fairfax is the second-biggest Australian newspaper publisher. (William West, file photo: AFP)

Fairfax Media, Australia's second largest newspaper publisher, has announced it expects to book impairment charges of $989 million in relation to its publishing assets.

The pre-tax write-downs include an impairment of $484.9 million to its metro media section, $408.8 million in its community media arm and $95.3 million to its operations in New Zealand.

Fairfax publishes the Sydney Morning Herald, the Australian Financial Review and other newspapers, and was previously expected to post a net profit of $145 million for the year to June 30, according to Reuters data.

"The Australian Metro Media adjustments reflect the market realities that the metro business is facing," said chief executive Greg Hywood, while also flagging challenging conditions to its rural and regional markets.

"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."

Domain to report separately

Meanwhile, Fairfax said it will separate reporting for its real-estate business Domain, a strong performer that made up around two-thirds of Fairfax's total earnings when it reported in February.

"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 in a statement to the ASX.

Traditional publishers have continued to face disruptions and pressure from a fall in print revenue as readers move online to find news and content.

Shares in Fairfax dropped 1.2 per cent to $1.038 at 11:01am (AEST), compared to a broader market rise of 0.6 per cent for the ASX 200.

Fairfax is due to report its full-year earnings on August 10 and said the impairments outlined do not affect its ability to pay future dividends.

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