News Corp swings to $643m loss on impairment charges

US media giant News Corp has reported a net loss of $643m (£495m) for the year ended 30 June, mainly as a result of one-off impairment charges.

The Rupert Murdoch-owned company took impairment charges of $785m against its UK and Australian newspaper businesses, while it also wrote down the value of its 50% stake in Australian pay television company Foxtel.

It has pursued aggressive cost-cutting at its Australian publishing arm this year, including cutting up to 70 staff photographers from its books in May in an effort to save $40m.

The firm, which publishes the Wall Street Journal, the Times and the Sun, had posted a profit of $250m in the previous financial year.

Group revenue edged down 2% year-on-year to $8.14bn, with revenues in news and information services falling 5%.

Advertising revenues fell by 7% to $2.6bn, with the firm blaming "weakness in the print advertising market", while circulation revenues slid by 5%.

These were partially offset by strong growth in Digital Real Estate Services, which generated 37% of the group's pre-tax earnings.

"Fiscal 2017 was a significant year for News Corp as 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," chief executive Robert Thomson said.

Thomson added that News Corp was in talks with social media giants such as Facebook about subscriptions to its content online.

"News Corp led the global debate about content value and values, prompting the digital platforms to address a dysfunctional content eco-system, in which the fake and the fraudulent have flourished," he stated.

"We are now in advanced discussions with those platforms over the creation of payment mechanisms for news of verified veracity."

Digital accounted for a quarter of revenues in the news and information business, up from 22% in the previous year.

News Corp also owns book publisher HarperCollins and the Fox broadcasting network in the US.

Revenue in the book publishing business was 1% lower, mainly as a result of foreign exchange fluctuations.

The company's share price closed 3.5% lower in New York.