Nine Entertainment earnings plunge 95pc to $58 million

NINE Entertainment has posted a 95pc drop in statutory net profit after tax to $58m and signalled a “soft” outlook for the advertising market.

NINE Entertainment has posted a 95 per cent drop in statutory net profit after tax to $58 million, and signalled a “soft” outlook for the advertising market.

Nine has presented its first full-year results after the completion of a float on the local stock market and a debt refinancing on a pro forma basis.

On this basis, net profit after tax rose 3.4 per cent per cent to $144.2m in the year ending June 2014, with revenue up just 0.8 per cent to $1.6 billion.

The fall in NPAT reflected several significant items, including recapitalisation of the company’s balance sheet, the company said in a statement this morning.

Group earnings before interest, taxes, depreciation, and amortisation gained 2 per cent to $311m.

The board declared a dividend of 4.2c per share unfranked, which is 2.5 per cent ahead of the forecast. Earnings per share was 16.4c, up 3.2 per cent on forecast.

Investors looking for signs of a recovery in a persistently weak advertising market will be disappointed with Australia’s metropolitan free-to-air television advertising market likely falling by as much as 10 per cent in the July-to-September period.

In outlook commentary, Nine said: “In light of the soft FTA market over the first quarter of the new financial year, first-half results are likely to be subdued.”

Still, the Sydney-based broadcaster said it continued to target a 40 per cent share of ad-market revenue by the end of 2015.

Ad markets across the country were boosted last year by spending on the federal election, benefiting media companies that have struggled amid weaker business sentiment as Australia’s economic growth has cooled due to slowing mining investment and rising unemployment.

Nine said it managed to grow its share of metro free-to-air ad-market revenue to 38.7 per cent from 37.9 per cent in the year through June 30 as the underlying ad market improved.

IChief executive David Gyngell said that despite an increasingly difficult ad market, the company exceeded the forecasts given in its listing prospectus.

Roughly a year after it was pulled from the brink of insolvency thanks to a multibillion-dollar debt restructuring, Nine launched what was the biggest IPO of an Australian media company. Despite the challenges of the ad market and popularity of watching films and TV online or on pay-TV networks, free-to-air networks in Australia still attract millions of viewers each day.

Billionaire Kerry Stokes’ Seven West Media this week said it had swung back to a full-year profit after being dragged to a loss the year before by writedowns and one-off costs.

The free-to-air broadcaster and publisher’s overall revenue dipped slightly, but that from TV rose 3 per cent in the year.

With Dow Jones Newswires