News Corp declares most profitable quarter in seven years
Pay TV company Foxtel has reported a large increase in paying subscribers due to the growth of streaming service Kayo Sports and Binge as News Corp declared its most profitable quarter in years.
The Rupert Murdoch-controlled media company announced a slight dip in revenue to $US2.4 billion ($3.2 billion) for the three months to December 31 due to falling revenue in its publishing division, but earnings before interest, tax, depreciation and amortisation grew from $US355 million to $US497 million. Adjusted revenue increased by 2 per cent compared to the same time the previous year.
Earnings in the subscription video segment grew substantially, boosted by a 12 per cent increase in Foxtel’s total paying subscribers to 3.3 million. Foxtel is 65 per cent owned by News Corp and 35 per cent owned by Telstra.
News Corp chief executive Robert Thomson said it was the best quarterly financial result in years.
“The second quarter of fiscal 2021 was the most profitable quarter since the new News Corp was launched more than seven years ago, reflecting the ongoing digital transformation of the business,” Mr Thomson said.
“There was also a 77 per cent rise in segment EBITDA at the subscription video services segment, where the exponential evolution at Foxtel continued apace, with streaming customers increasing over 90 per cent, rights costs reset and audiences for summer sports at unprecedented levels.”
Of total paying subscribers, 2 million were residential and commercial broadcaster subscribers while Kayo made up 624,000 and Binge contributed 431,000. The EBITDA increased was mainly due to a reduction in programming and product costs from the renegotiation of broadcast deals with sports such as the AFL and NRL and cost reductions in entertainment programming and overhead expenses. Revenue increased by $10 million in the quarter but was offset by lower residential and commercial (pubs, clubs) subscribers. Adjusted revenue fell 5 per cent compared to the same time the previous year.
Meanwhile, News Corp Australia, which publishes The Australian, The Daily Telegraph and The Herald Sun reported a revenue fall of 11 per cent. The fall contributed to a 29 per cent increase in revenue for the news media segment.
Half year results for News Corp’s real estate listing arm REA Group showed a 2 per cent fall in revenue to $430 million, but net profit grew 17 per cent to $173.4 million.
More to come
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Zoe Samios is a media and telecommunications reporter at The Sydney Morning Herald and The Age.
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Source: Thanks smh.com