Nine Entertainment Co has lowered its full year earnings forecasts after a 'softer than anticipated' start to the new year.
Revenue fell by 1.7 per cent for the half year to December to $1.19 billion, while group earnings before interest, tax, depreciation and amoritisation (EBITDA) was $250.8 million on a reported basis, a flat result compared to last year's pro forma results.
Net profit after tax fell by 18 per cent to $114.3 million when comparing to half year pro forma results for the same period last year.
Nine CEO Hugh Marks.Credit:Louise Kennerley
Nine is the owner of The Sydney Morning Herald and The Age.
On Wednesday Nine said it expected to report group EBITDA at a 'similar level' to the pro forma results from the previous financial year of $423.8 million.
The company previously forecast at its annual general meeting last year "low single digit growth" in group earnings before, interest, tax, depreciation and amortisation this financial year.
Before that, at its full year results last August, Nine said it expected to report earnings growth of around 10 per cent.
Chief executive Hugh Marks said growth in digital had helped offset "cyclical headwinds" in other parts of the business as he outlined plans for cost cuts in the television business.
"Nine is in a unique and incredibly exciting position. Recognising this company-wide evolution, we believe there is significant potential to refocus the cost structure of our FTA business, targeting the removal of up to $100m in annualised costs over the next three years – costs that will not inhibit our ability to continue to invest in growth opportunities around premium revenue and digital video, as we have done successfully over the last three years," Mr Marks said.
Broadcast revenue fell by 5 per cent for the year to $630.8 million, hurt by declines in television and radio advertising spend. EBITDA fell to $145.5 million. Revenue from the metro publishing and digital fell by 3 per cent for the period, to $288.3 million, but EBITDA climbed to $53.8 million. Streaming service Stan posted strong revenue growth, up 79 per cent for the half year.
Nine closed at $1.62 a share on Tuesday.
A fully franked interim dividend of 5¢ a share will be paid on April 20.
More to come
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