Prime write down radio assets by $15m

Prime Media have released their half-yearly financials this morning, with the big headline being a massive writedown in the book value of their Queensland radio assets.

Prime Radio reported a fall in revenue to $10.3m for the 6 months to December 31, 2012, translating to an EBITDA result of $1.9m; down from $2.5m in the same period the previous year.

Accordingly, the company has written down the radio assets by $15m to have them on the books as being worth $26.26m. The Prime Radio assets were purchased in total for around $70m across a 5-year period.

Prime Media CEO Ian Audsley (left) spoke to the radio results particularly, saying that challenging trading conditions persist, and weak consumer confidence has let to a 'short' advertising market du in part to the "effects of three natural disasters in the past two years".

Audsley commented further;

"Combined with the fact that the full impact of recent significant flooding in central Queensland coastal markets is yet to be fully understood and the potential for further such occurrences in the future, the board believes the impairment is prudent,"

"Because we are geographically locked into Queensland, we suffer every ill that occurs there, we think radio will continue to be tough for the foreseeable future. Radio is having to work extremely hard to convert in a very weak economic and ad-spend environment."

The television arm of Prime has performed well with EBITDA improving by 6.4% to $38.3m, however the consolidated result was hit heavily by the radio division.

Excluding the impairment to the radio assets, Prime Media reported net profit of $19.4m, an increase of 21% on the previous corresponding period. Consolidated revenue grew 3.9% to $144m.

Prime Media have declared an interim dividend of 4c per share.