Nine Entertainment has posted a drop in full-year profit as the economic slowdown took a toll on advertising demand across its broadcast, publishing and radio divisions.
The company on Thursday reported a 38 per cent fall in net profit to $195 million, weighed down by an $85 million charge to write down the value of radio licenses and other assets, with revenue for the period holding steady at $2.7 billion. Full-year operating earnings before the one-off charges dropped 16 per cent to $591.2 million, in-line with management forecasts.
Nine’s shares rose 1.5 per cent to $2.06 in early trading.
Whilst below last year’s earnings, the media conglomerate pointed out that the result, excluding the one-off charges, was the second-strongest since relisting its shares on the ASX in 2013.
Chairman Peter Costello said that while the company faced tougher economic conditions, which have hit the entire media industry, Nine had “risen to the challenge” by continuing to drive audience and revenue share.
Looking ahead, the company said that trading in the new financial year started July 1 “has begun much as [financial year 2023] ended.
“The advertising market remains subdued, particularly in FTA [free-to-air television], digital display and print publishing,” it said in its outlook. “Against this backdrop, Nine has continued to outperform in each of its operating segments.”
Nine is the owner of this masthead. It also owns The Australian Financial Review, as well as the Nine Network, radio stations including 3AW and 2GB, subscription streaming platform Stan and broadcast video on-demand platform 9Now.
Chief executive Mike Sneesby said Nine’s television business, which includes its free-to-air channels as well as 9Now, had an extraordinary year, with record revenue share results.
“Media in Australia is evolving rapidly,” he said. “Through Nine’s premium content, broad distribution capabilities and strong balance sheet, we intend to remain at the forefront of that evolution.”
Revenue in Nine’s broadcast business fell by 1 per cent to $1.36 million, with costs rising 7 per cent and earnings before interest, tax, depreciation and amortisation (EBITDA) falling 20 per cent to $319.5 million, down on last year’s figures, but above pre-COVID levels, the company said.
The drop was largely owed to a struggling metro free-to-air advertising market, which declined 11 per cent year-on-year, and 15 per cent in the June half, Nine said.
Streaming service Stan was a strong performer, with revenue up 12 per cent, and earnings up 30 per cent to $37.1 million, with current active subscribers “approaching 2.6 million”. Costs increased by 11 per cent, partly owed to continued investment in Stan Sport.
Publishing revenues declined by 3 per cent to $575.2 million, with earnings down 8 per cent to $164.7 million, again down to a softer ad market, Nine said. Total subscription revenue grew by 3 per cent, with more than 460,000 active subscribers now across The Sydney Morning Herald, The Age, and The Australian Financial Review.
The results come amid a grim reporting period for Australia’s media companies. Radio-heavy ARN, which also delivered its half-year results on Thursday, saw its revenue fall 4 per cent and net profit excluding significant items slump 40 per cent. Its chairman, Hamish McLennan said radio advertising sales had been hit by reduced consumer spending and a slowing of the economy.
Meanwhile, full-year profits at Seven West Media fell by 18.2 per cent and 20.1 per cent at Southern Cross Austereo.
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Source: Thanks smh.com