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Fairfax Media (ASX: FXJ) will axe or sell 28 of its New Zealand print publications as it announced a 54 per cent fall in first half profit.
The publisher of masthead titles including the Sydney Morning Herald and The Age reported its net profit for the half year to December 24 had dropped to $38.5 million, down from $83.7 million it recorded in the prior corresponding period.
The profit drop was due to impairment charges and restructuring costs related to the spinoff of the real estate website business Domain and revenue for the half year fell 3.9 per cent to $877.1 million. Excluding significant items such as impairment charges, underlying profit fell 9.9 per cent to $76.3 million.
The company announced that 28 titles and about 60 staff in New Zealand would be affected as the papers went digital only over the next six months.
Stuff chief executive Sinead Boucher, who heads one of Fairfax's digital titles in New Zealand, says meetings with staff will be held over coming weeks.
"We appreciate that this process creates a level of uncertainty for some people and we will move as quickly as possible to provide them with clarity," Boucher says.
"Changing the print portfolio has involved some tough decisions, but it is clear where the future of the business lies."
The axing and selling of print titles in New Zealand was announced after the country's High Court backed a decision by the competition watchdog to block an attempted merger between Fairfax's Stuff and rival NZME.
Fairfax chief executive Greg Hywood had previously warned there would be cuts in New Zealand if the merger did not go through and says the company will continue to carry out cost savings programs in the year ahead.
Hywood also revealed Fairfax was in discussions with its main competitor News Corp Australia to work together to reduce costs, mostly involved in the production and distribution of print publications.
"We have progressed our recent positive discussions with News Corp Australia to seek industry-wide efficiencies in printing and distribution," Hywood says.
"We have had successful collaborations around shared trucking and printing titles for news in Queensland. Building on this collaboration we have just appointed advisers to pursue deeper strategic opportunities."
Fairfax declared a fully franked interim dividend of 1.1 cents, down from a partially franked 2.0 cents a year ago.
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