TVNZ Reports Ebitdaf of $17.4 M

31 August 2017
TVNZ Reports Ebitdaf of $17.4 M After Writing Down Onerous Content Contract

TVNZ reported EBITDAF of $17.4 million (down $19.5 million on the previous year) largely due to an onerous contract provision and marginal year on year declines in advertising revenue.

TVNZ’s content output agreement with Disney has become loss making and it has booked a $12.4 million provision in FY2017 to recognise the forecasted future losses of this contract.

Revenue declined 2.5% ($8.1 million) to $316.5 million. TVNZ has partially offset market declines in TV advertising by growing its share of the TV advertising market and increasing online revenue growth.

Excluding the onerous contract, operational expenses decreased $1.0 million to $286.7 million - including the increased costs of organisation restructuring.
TVNZ posted an after tax net profit of $1.4 million for FY2017 down $11.3 million on the previous year.

Announcing its full year results, TVNZ Chief Executive Kevin Kenrick says: “It’s been a year of big challenges, big projects and a few tough decisions.”

“TVNZ exceeded its goal of engaging 2 million New Zealanders per day with peak audience TV share reaching a multi-year high and TVNZ OnDemand delivering double-digit growth in audience reach. Other highlights include TVNZ.co.nz upgrades to bring together live streamed TV channels and OnDemand viewing, a refresh of TVNZ branding, and the 25 year anniversary of New Zealand’s most watched local entertainment series, Shortland Street,” says Mr Kenrick.

“The other big focus for the year has been the significant steps taken to create a more sustainable future including redesigning the organisation structure, renegotiating core content agreements, and writing off unsustainable content and accommodation lease commitments,” says Mr Kenrick. “These actions will enable the business to confidently increase future year investments to accelerate digital growth.”

The 2017 financial year started with accelerated declines in the TV advertising market and ended with TVNZ delivering year on year growth in TV revenue. The positive year end momentum has continued into FY2018 as advertisers are relying on the broad reach of TV to promote brands and questioning the brand safety and fraud risks of global digital advertising options.

TVNZ Chairman, Dame Therese Walsh, says that excluding the onerous contract provision, TVNZ financial outcomes were in line with targets set out in its annual Statement of Performance Expectations. “With improved revenue and cost trajectories, TVNZ is on track to grow EBITDAF in the year ahead and well positioned to continue delivering the moments that matter to New Zealanders.”

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