WAN posts lift in first quarter profit

West Australian Newspapers Holdings Ltd has posted a lift in profit for the first quarter of fiscal 2009, despite a weaker advertising market.

WAN reported net profit of $29.65 million for the three months to September 30, a 43.8 per cent jump on the prior corresponding quarter, the company said.

Net profit on a normalised basis was up 5.4 per cent also to $29.65 million, compared to the prior corresponding period.

WAN said the advertising market remained uncertain, but that certain revenue and cost initiatives would help it mitigate an advertising downturn.

"The benefits of (its) press upgrade and further revenue and cost initiatives will assist in mitigating further softening of the market," WAN said.

In the first four weeks of October, advertising revenue was down 7.8 per cent on the corresponding period last year.

WAN said display advertising was down six per cent and classifieds were down 12 per cent, with employment, motoring and real estate categories all below the prior year.

WAN said new homes advertising was showing a solid 35.5 per cent growth on last year.

For the first quarter of fiscal 2009, WAN said its main newspaper, The West Australian, performed solidly, with cost controls offsetting some of the advertising shortfall.

"Despite the weaker advertising market, particularly in the classified categories, WAN has recorded an increase in its net profit after tax," WAN chief executive Ken Steinke said.

"Our flagship product, The West Australian, was able to offset some of the advertising shortfall with tight cost controls and other initiatives."

Mr Steinke said WAN was managing its business in a tougher trading environment.

"However, we remain committed to our future strategies, and have maintained our investment in our digital division, and in our circulation and marketing areas," he said.

"Longer-term, we believe we will reap the benefits of those commitments."

Mr Steinke said the proceeds from the sale of Hoyts last year, which was used to pay off debt, has resulted in a considerably lower interest charge, helping the final profit figure.

"That reduction in external debt also enhanced the strength of the company's already very solid balance sheet," he said.

The West Australian's Monday to Saturday circulation was 3.1 per cent below the corresponding quarter last year.

The newspaper reported a fall in revenue of 2.5 per cent in the quarter to $89.2 million, while net advertising revenue fell 2.7 per cent to $68.3 million and circulation revenue fell 2.1 per cent to $18.6 million.

Expenses in The West Australian fell 2.4 per cent to $47.5 million in the three months.

Mr Steinke said WAN's magazines, regionals and the classified publication, Quokka, continued to grow in the quarter despite tough conditions.

At the meeting today, Kerry Stokes and right hand man Peter Gammell were officially voted onto the WAN board.