TVNZ Back In Profit After Strong Year
3 September 2008
TVNZ Back In Profit After Strong Year
Television New Zealand made an after tax profit of $19.4 million for the financial year ended June 2008, Chief Executive Rick Ellis said today.
This was from operating earnings before non recurring items, interest, tax and financial instruments of $27 million, which represents a $14.3 million turnaround or a 112 % increase over the prior year.
Mr Ellis said the strong result was off the back of higher advertising revenues from higher channel ratings and getting the organisation's costs under control.
Mr Ellis said the annual result meant TVNZ achieved a return on average equity of 8.3%, which was ahead of the 6.4 % target set for the year.
TVNZ would be paying a $10.3 million dividend to the Crown.
Excluding Government funding for the digital channels, total income for the year was $379.7 million, an increase of $4.7 million (or 1.3%) over the prior year. The primary driver of this increase was a $2.7 million (0.9%) increase in advertising revenue.
Excluding costs for the digital channels which are covered by Government funding, total expenses were $352.6 million for the year, a reduction of $9.7 million (2.7%) on the prior year's operating costs.
That means TVNZ had a year on year improvement in earnings (before non recurring items, interest, tax and financial instruments) of $14.4 million from the $4.7 million improvement in income and the $9.7 million of cost reduction from the core business.
"Our revenue targets for the year were all exceeded. This is year one of the TVNZ three year turnaround plan and it's a credit to a highly motivated and focussed staff working to a well thought out strategy," he said.
"Our increase in advertising revenue is particularly pleasing given the broadcasting of the 2007 Rugby World Cup occurred on a competing channel in September and October 2007 and the market conditions in the latter part of the financial year. TVNZ television advertising revenues were strong in the second half of the year with a year on year increase of 3.4 % for the January to June period.
"While the economic outlook for the 2009 financial year is challenging for many New Zealand businesses we are cautiously optimistic about the environment and confident in our abilities and plans."
He said local content hours on TV ONE and TV 2 were at similar levels to the previous year at 4,867 compared with 4,822 and 15 of the 20 top rating programmes for the year were on TVNZ channels. It was particularly pleasing that 17 of the 20 top rating programmes on TV ONE were locally produced.
That quantity of local content doesn't count the impact of TVNZ 6 and TVNZ 7 and is more than three times TVNZ's nearest rivals.
"We've had a very strong year on screen. Our flagship ONE News at 6pm has had consistent lifts in its ratings, shows like Dancing With The Stars have proved extremely popular, coverage of major events like Sir Edmund Hillary's state funeral captivated the public and the launch of TVNZ 6 and TVNZ 7 has enabled TVNZ to extend its range of programmes and its value to New Zealanders as the country's public broadcaster."
He said TVNZ continued to work hard on its strategy of 'inspiring New Zealanders on every screen' with commercial deals signed with Bebo, Google, Telecom, Fairfax, South Pacific Pictures, Greenstone Pictures and Chinese Television.
TVNZ ondemand had become enormously popular in the space of 18 months with 30,000 hours of television watched on average each month, while tvnz.co.nz. has monthly average unique visitors of 826,000.
He said other highlights included:
• higher than anticipated uptake of digital platform Freeview, of which TVNZ is the largest shareholder;
• the beginning of a $30 million investment in TVNZ's digital infrastructure;
• conducting the first statutory review of the TVNZ Charter;
• the use for the first time in the annual report of a framework to measure TVNZ's delivery of the Charter; and
• more than 600 hours of content broadcast to 14 Pacific nation broadcasters via the TVNZ Pacific Service.
N.B. This is the first year that TVNZ has used the new New Zealand International Financial Reporting Standards.