FAIRFAX SAYS HIGHER TAX HITS FIRST HALF EARNINGS
Media group John Fairfax Ltd <FFXA.S>
said that its flat first half net profit partly reflected the
impact of changes in the Australian tax system.
    Fairfax earlier reported net earnings edged up 2.3 pct to
25.94 mln dlrs in the 26 weeks ended December 28 from 25.35 mln
a year earlier although pre-tax profit rose 9.1 pct to 48.30
mln from 44.29 mln.
    Net would have risen 10.1 pct but for the increase in
company tax to 49 pct from 46 and the imposition of the tax on
fringe benefits, paid by employers and not the recipients, the
company said in a statement.
    Fairfax also pointed to the cyclical downturn in revenue
growth in the television industry as another reason for the
flat first half earnings.
    It said it considered the result satisfactory in view of
these factors.
    Fairfax said its flagship dailies, The Sydney Morning
Herald and the Melbourne Age, boosted advertising volume, as
did the Australian Financial Review, and posted extremely
satisfactory performances. Magazines also performed strongly.
    But an 8.9 pct rise in television costs outweighed a 4.0
pct rise in revenue, it said.
    Fairfax said a fall in net interest also contributed to net
earnings because group borrowings were reduced following the
receipt of a 96.11 mln dlr capital dividend from <Australian
Associated Press Pty Ltd> (AAP) after the sale of AAP's "B"
shares in Reuters Holdings Plc <RTRS.L>.
    This accounted for the 89.32 mln dlr extraordinary profit.
    Fairfax said it is too early to predict results for the
full year. Increased borrowings after the recent 320 mln dlr
acquisition of the HSV-Seven television station in Melbourne
will hit earnings but networking with the Channel Sevens in
Sydney and Brisbane will produce some offsetting cost savings.
 REUTER
