Embattled media group Fairfax says gloomy conditions in the advertising market are still dragging on its revenues.
The group on Thursday reported a big rise in its first half net profit, thanks to the sale of its stake in Trade Me and its agricultural publishing business in the United States.
Fairfax's net profit rose to $386.3 million during the first half ended December 30 from $97.6 million in the previous corresponding period.
Excluding the businesses sold during the period, Fairfax recorded a net profit of $83 million, down from $135.7 million.
Revenue dropped to $1.1 billion from $1.2 billion, in line with analysts' expectations because of declining advertising income.
Fairfax chief executive Greg Hywood said trading conditions remained tough, with December revenues down five per cent on the same period a year earlier.
Revenues for the first six weeks of the second half were nine to 10 per cent below the previous corresponding period.
"Continuing weakness in real estate and the national advertising market are providing a drag on group revenue, although there is considerable volatility from month to month," he said in a statement on Thursday.
"A sustained improvement in consumer sentiment is required in order to see an uplift in a number of our key advertising categories, and we note recent positive economic commentary in relation to the consumer economy."
Fairfax cut its fully-franked interim dividend to one cent a share from two cents a share.
Mr Hywood said Fairfax's financial performance during the first half was in line with expectations, given the challenging economic conditions.
The media group's transformation plan was also ahead of schedule, he said.
The embattled media group is in the middle of a four-year, $235 million cost-cutting program, which has included 1900 job cuts.
Mr Hywood said Fairfax's metropolitan media division, which includes the Sydney Morning Herald and The Age newspapers, continued to be profitable, with rising circulation revenue.
However weakness in government spending, employment and real estate ads weighed on the performance of the group's regional and agricultural division.
Elsewhere, Fairfax's radio division lifted ad revenues 6.8 per cent in the first half.
Mr Hywood said Fairfax's net debt was now less than $200 million, allowing the group to invest in its businesses.
He said the group was on track to deliver annualised run-rate savings of $169 million by this June and $251 million in mid 2015.
"We are currently pursuing potential additional structural initiatives and cost savings beyond those currently envisaged under the Fairfax of the Future program," Mr Hywood said.
Fairfax shares were 1.5 cents lower at 53 cents at 1021 AEDT.