Fairfax Media Half-Year Results

Biannual financial results report a net profit up 39.4%

FAIRFAX MEDIA REPORTS NET PROFIT AFTER TAX OF $187.7 MILLION, UP 39.4%
FOR THE SIX MONTHS TO 31 DECEMBER 2006

UNDERLYING NPAT OF $196.3 MILLION, UP 61.7%
(PRE NON-RECURRING ITEMS AND AFTER SPS DIVIDENT)

UNDERLYING EARNINGS PER SHARE OF 13.1 CENTS, UP 8.6%

FAIRFAX DIGITAL EBITDA UP 41.2% AND TRADE ME EARNINGS (in NZ$) UP 39.9%

INTERIM DIVIDEND OF 10.0 CENTS PER SHARE


David Kirk, CEO

“Our first half results, marked by substantial earnings growth, reflect the benefits of our strategy of growth and diversification, and the initial results we have achieved from the successful integration of our publishing, digital and electronic media assets.

We are committed to delivering on the investments we have made, with a clear focus on EPS growth. We are reporting strong EPS growth, even after a significant increase in the number of shares on issue following the merger with Rural Press. We expect strong EPS growth to continue.

Fairfax Media is growing across all fronts. Digital earnings continue to enjoy explosive growth both in Australia and from Trade Me in New Zealand. Australian publishing is stronger, notwithstanding continuing weakness in the Sydney market. Regional and rural publishing had solid gains in the face of the worst drought in a century. New Zealand publishing has recovered. The AFR and Fairfax Magazines both had good growth.

We are continuing to secure synergies with Rural Press and the new Fairfax Media Radio Group, and these efforts are yielding excellent results.

These overall results reflect the continuing success of our strategy of (1) defending and growing our newspapers, (2) delivering high growth online, and (3) becoming a digital media company for the 21st century.

The first half has been marked by significant achievements across all three strategic priorities:

• The integration with Rural Press has delivered synergies of $9.5 million and the Company is on target to achieve $45 million by the end of the next financial year.

• Circulation and readership growth for our major newspaper mastheads is continuing, with gains in market share against key competitors. • Continuing strong growth in regional and rural publishing.

• Fairfax Business Media, led by the AFR, had substantial revenue growth driven by circulation increases and strong advertising markets. The re-launch of afr.com has been a success.

• The Fairfax Media radio stations are being successfully integrated with personnel restructuring completed and rebranding of the stations and news network implemented. The regional Rural Press radio stations enjoyed strong revenue growth. Back office integration is virtually complete.

• Southern Star has had continuing revenue and earnings growth in program production and distribution.

• Fairfax Digital in Australia continues its leadership position in online news and information with revenue growth in excess of the overall online advertising market, and audience growth of nearly 80% year-on-year. The diversification of Fairfax Digital’s businesses, such as the acquisition of InvestSMART, is generating significant new transaction revenues.

• Trade Me in New Zealand continues to exceed revenue and earnings targets with its successful expansion into travel and new car sales.

• Revenue growth across Fairfax Magazines.

• Continuing strong cost management across the group.

• Renewed growth in New Zealand publishing

• Successful completion of our move to One Darling Island and improved editorial processes through the benefits of the Newsroom of Today for Herald Publications. These are positive and promising times for our staff, our shareholders and our company’s future.”


Ronald Walker, Chairman

Ronald Walker, Chairman “Our Board is very pleased to report significant earnings growth and excellent returns for our shareholders.

Our commitment is to deliver on the expansion and growth undertaken over the past year, and for all the media assets under our management – new as well as old – to continue to add wealth to our shareholders.

Fairfax Media has emerged as the largest and most diversified media company in Australasia, and Fairfax Media is more competitive and successful than ever before.

Fairfax Media and its shareholders greatly benefit from the efforts of our dynamic people and the commitment of our Board of Directors.

As always, I want to pay tribute to our staff – our greatest asset. Their dedication across all aspects of the business, from wherever they serve us around the globe, makes Fairfax Media one of the most pre-eminent media companies in the world. They are the key to our future, and I thank them for their efforts.”

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Source: Fairfax Media
Release Date: 21 Feb 2008 00:00