News Corp Australia saved $40 million in operating costs over the past financial year, as well as a 5% reduction in core costs in the June half year, the company revealed at its full-year results briefing this morning. CEO Robert Thomson said News Corp Australia was looking at further cost reductions through “shared services”, but did not elaborate. The company closed seven Leader newspapers in Melbourne this year, and embarked on a redundancy round in the latter part of last year that had 55 staff shown the door.
Thomson said the company would be looking for cost and other savings if allowed to buy the APN regional dailies and other papers. He said that would improve the company’s coverage of Northern Australia (Queensland) and was looking especially for synergies with REA Group in real estate in the new areas. CFO Bedi Sing said “higher prices and digital subscriptions”offset “print falls” in Australia in the year and quarter. Both Sing and Thomson said the company is looking at getting the rest of the 5% core savings in the next few months, meaning tens of millions of dollars more in cost cuts by early 2017. Once again News did not say if the various geographic parts of the newspaper business operated at a loss or a profit in the final quarter or full year.
The cost reductions come as advertising in the group continues to fall. Revenues at News Corp Australia fell 9% in local currency, and while digital ad revenues rose modestly, they were not enough to offset the loss of print revenues. One bright spot for the journalism businesses was the growth in digital subscriber numbers. In Australia, total digital subs across all newspapers rose 20.8% to 272,700.
The company said print volumes fell globally and circulation revenues were higher because of a combination of more paywall and other digital subscribers, plus price rises for the paywalls and for the newspapers.
Both Thomson and Singh emphasised that the company’s future was in being diversified and digital.
News Corp globally reported full year total revenues of US$8.3 billion, down 3% compared with 2014-15’s US$8.5 billion. Profit from continuing operations fell to $US235 million for the 20915-16 year compared with US$367 million in 2014.