Newspaper and radio group, APN News & Media Limited says the Queensland floods and New Zealand earthquakes will clip first half earnings by more than $10 million.
Around $9 million of that reduction will be felt in the March quarter, the company said yesterday.
The company said the biggest impact was in Queensland where the flooding in January continues to have a financial impact.
Despite this, APN said its radio and outdoor businesses were doing better than budget and were also ahead of where they were a year ago.
"At the time of the release of the 2010 full year result, APN advised that following the devastating Queensland floods in early 2011, its Australian Regional Media (ARM) division had recorded a year-on-year $3m reduction in Earnings Before Interest and Tax (EBIT) in January.
"As expected, the EBIT impacts have moderated into February and March, with the cumulative impact of $6m EBIT shortfall for the quarter. These shortfalls are expected to moderate further throughout Q2.
"Subsequent to the results announcement it has become clear that the Christchurch earthquake on 22 February 2011 has impacted an already subdued New Zealand economy, particularly rural and regional New Zealand.
"Coupled with a lower exchange rate this has resulted in APN’s New Zealand Q1 EBIT being down $4m (in $A terms) year on year, including a $1m impact from the weaker exchange rate.
"In stark contrast, the performances of APN’s cross-Tasman Outdoor and Radio operations continue to show strong growth and to date are ahead of both budget and the prior year.
"Additionally, the performance of APN’s Digital initiatives and investments are building meaningful new revenue streams for the Group.
"GrabOne, APN’s digital coupon business remains the clear market leader in New Zealand, is rolling out to new Australian markets and is building ahead of expectation.
"The online classified alliance with Fairfax in Queensland also continues to gain good traction.
"Although the Queensland economy is still volatile, it is expected that Queensland will recover and return to its strong growth trajectory. Despite its current weakness, the New Zealand economy is forecast to return to growth in 2012. Additionally, the Reserve Bank of New Zealand has recently reduced interest rates and other moves to stimulate the economy in the short term are likely.
"The impact of these two severe natural disasters has meant that Group EBIT in Q1 is estimated to be down $9m compared to 2010.
"The Queensland impacts are moderating and Outdoor and Radio continue to trade ahead of the prior year.
"In relation to New Zealand Media a range of initiatives are being actively pursued so as to limit the impacts of the weaker New Zealand economy.
The AGM for the 2010 financial year will be held on May 3.
APN shares rose 2%, 3c to $1.54 yesterday.
