Real estate stars as News Corp posts loss
Online real estate ads have been a powerhouse for News Corp as ad revenue slipped over the full year in the media company's core news division.
News Corp has reported a group-wide loss of $US643 million ($A818 million) for 2016/17, sharply reversing the $US235 million gain in operating income last year.
Lower ad revenue and a decline in circulation and subscription revenue in the core News and Information Services division pushed segment revenue down five per cent to $US5.07 billion, the media giant reported on Friday.
However full-year revenue for its Digital Real Estate Services business, which includes its majority stake in Australia's REA Group, rose 14 per cent to $US938 million - the best performance across the company's divisions.
News Corp's group full-year revenue was $US8.14 billion, down from $8.29 billion in the previous year, with the contraction amplified by a shorter reporting period and negative foreign currency movements .
However, earnings before interest, tax, depreciation and amortisation (EBITDA) for the year were $US885 million, up 29 per cent from the previous year, which had included two one-off items.
News Corp chief executive Robert Thomson said 2016/17 was a significant year for the company.
"We saw tangible improvement in profitability, powered by the fast-growing digital real estate services segment, and we charged a premium for premium content while focusing on operating efficiencies," Mr Thomson said in a statement.
Mr Thomson also referred to the debate around reliable and verifiable news services and the role of social media that had swirled following the US presidential election and "fake news" stories that tried to influence voters.
"News Corp led the global debate about content value and values, prompting the digital platforms to address a dysfunctional content ecosystem in which the fake and the fraudulent have flourished," he said.
Mr Thomson said News was in advanced discussions with digital content platforms about payment mechanisms "for news of verified veracity".
News Corp's slide into a group loss was driven by a $US785 million pre-tax writedown on assets at its Australian and UK newspapers, a pre-tax $US227 million writedown of its investment in Foxtel and higher tax expense.
Digital real estate accounted for almost 40 per cent of News Corp's profits in 2016/17 and Mr Thomson said earnings for the division was expected to grow.
Locally, REA Group on Friday reported a 12 per cent rise in net profit to $228 million while revenue from core operations rose 16 per cent to $671.2 million.
News Corp shares closed $1.00, or 5.4 per cent, lower at $17.40 on Friday.
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