Rupert Murdoch’s News Corp (NWS) finally produced its 2012-13 results early Saturday morning our time with a quiet filing with the US Securities and Exchange Commission, which will be released to the ASX first thing this morning.
The figures are as confusing as any struggling company’s report and make those from rival media groups, such as Seven West Media (SWM) or Fairfax Media (FXJ), look straightforward and easy to understand.
In short, had it not been for a revaluation gain on the holding in Fox Sports (increased to 100% by the takeover of Cons Media) and the sale of the News stake in Sky NZ, the company would have reported another heavy loss.
News reported a ‘book‘ profit for the year to June and a loss for the June quarter.
There’s no dividend for shareholders, and although one is promised, sometime, it won’t come for a while.
Fairfax Media and Seven West Media have paid dividends for the 2012-13 financial year, even if the Fairfax payment was only a couple of cents a share. Shareholders still got a return.
Looking at the full year figures, News said it earned $US506 million, against a loss of $US2.2 billion in 2011-12.
But that was as a result of the asset revaluation involving Fox Sports Australia and not a trading profit.
In fact the claimed profit gives no indication of how the company weakly traded.
NWS YTD – News Corp Profit An Accounting Outcome
The profit came from a $US1.3 billion gain from the company’s acquisition late last year of Consolidated Media Holdings, especially the 50% of Fox Sports Australia (News owned the other 50%). As well there was a $US331 million gain from the sale of the company’s controlling 61% stake in Sky NZ late in the year.
News Corp also recorded restructuring charges of $US293 million, primarily related to its Australian and UK newspaper businesses.
Overall, News Corp reported $US1.74 billion in impairment and restructuring charges in 2013, down from $US2.76 billion in the 2011-12 year.
Those actual and book gains came in very handy when you examine the accounts.
Buried in them was a line which said that if you treated the acquisition of Cons Media as having existed at July 1 2011, News revenues were $US9.084 billion, down from $US9.140 billion in 2011-12.
The company would have incurred a loss of $US798 million in 2012-13, up from the $US776 million the previous year.
That’s as close to the actual result (and not the book result) as we will get from News Corp.
It reported falls in ad revenues in its biggest business, news media and information, but higher circulation revenues from the new Sun on Sunday newspaper in the UK and price rises at many of its papers, helped soften the impact of that fall, but not by much.
News said revenue for its news and information services – which represented 76% of the company’s revenues in in the year to June – fell 4.6%, driven by a 10% decline in advertising revenues.
News Corp said the drop in advertising revenue was due to a challenging economic environment in Australia and, to a lesser extent, lower advertising revenue at Dow Jones.
"Revenues at the Australian newspapers for the fiscal year ended June 30, 2013 decreased 15%, as compared to fiscal 2012, primarily reflecting lower newspaper advertising revenues principally due to the continued challenging economic environment in Australia.
"For the fiscal year ended June 30, 2013, Segment EBITDA at the News and Information Services segment decreased $144 million, or 15%, as compared to fiscal 2012, primarily due to: a $192 million decrease at the Australian newspapers driven by lower advertising revenues; a $47 million decrease at the integrated marketing services business primarily related to increased production and retail commission costs; and a $25 million decrease at Dow Jones primarily as a result of decreased revenues and partially offset by the positive impact of cost saving initiatives.
"These decreases were partially offset by an increase at the U.K. newspapers of $98 million principally related to increases in circulation revenues," News said.
Further details on the Australian newspapers and other businesses were not given, except for an estimate of revenues of $US2.8 billion which was unchanged from the previous year. But they included $US322 million in revenues from Fox Sports Australia.
For the June quarter, News reported a 10% rise in revenue to $US2.3 billion and a loss of $US1.1 billion due to the $US1.4 billion impairment charge.
News shares ended at $18.04 in Australia on Friday.
