NEWS Corp's Australian operation, News Ltd, posted a $476.7 million loss for the financial year to June 30, after slashing the value of its newspaper mastheads following a double-digit decline in revenue.
The company reported that revenue declined 11 per cent to $2.6 billion, while operating income decreased 23.5 per cent to $493.6 million as "advertising revenues declined during the fiscal year driven by negative consumer sentiment".
News Ltd, which was the springboard for Rupert Murdoch's global expansion, is due to be folded into the publishing business that will be spun off as a separate listed entity next year from News Corp's film and television business.
The manoeuvre is designed to protect News Corp's more valuable film and broadcast assets from the hacking scandal engulfing its newspapers in the UK.
News Ltd recorded impairment charges totalling $731.7 million for the period, taking impairments to more than $1.4 billion over the past two financial years.
It said the charges reflected "lower future forecast earnings for these businesses and uncertainties surrounding the timing of future digital revenue streams".
News Ltd - which publishes The Australian, The Daily Telegraph and the Herald Sun - introduced paywalls to its mastheads this year and announced cost-cutting and restructuring initiatives to offset declining print revenue.
Most of the impairment charge relates to its mastheads, according to the financial statement that did not specify which newspapers the impairments were recorded against.
On Tuesday, News Ltd said that, consistent with other global publishing businesses, it faced structural changes that had resulted in the write-down of certain intangible assets.
"News Limited continues to invest strongly in the business, including our acquisition of Consolidated Media Holdings shares, investment in [websites] Business Spectator and The Eureka Report, and ongoing investment in new systems and our people," the company said. "We are undertaking these investments because we remain confident about Australian consumers and media."
Last month's $2 billion CMH acquisition helped lift News Ltd's stake in pay TV provider Foxtel to 50 per cent. It will be the only TV asset that will stay with the publishing business post-split, which will include the UK and US newspapers, and book publisher HarperCollins.
Early this month, Australian Robert Thomson was named as the new head of the publishing arm.
The report also confirmed News Ltd paid $29.8 million for Alan Kohler's Australian Independent Business Media, publisher of The Eureka Report and the Business Spectator websites.
While profits have fallen in the past two years, News Ltd pulled $1.2 billion in dividends out of the Australian company last financial year.