TVNZ beats full-year earnings targets in first six months
By Pattrick Smellie
Feb. 28 (BusinessDesk) - State-owned broadcaster Television New Zealand reported a 17 percent improvement in operating earnings for the six months to Dec. 31.
At $30.2 million, earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments are already well ahead of the $14.7 million full-year target operating earnings target accepted by shareholding ministers in its 2018 statement of performance expectations.
The result compared with $25.8 million in the same period the previous year. Net income after tax for the half-year was $17.2 million, up 34 percent, or $4.3 million on the previous comparable half-year, and also well ahead of the $2.2 million target in the 2018 statement of expectations.
Assuming no repeat of the previous year's writedown on the value of onerous contracts, which knocked a $12.4 million hole in earnings for the 2017 full financial year, and strong advertising demand during broadcasting of the Commonwealth Games in the second half of the current financial year, TVNZ appears likely to end the current financial year with results far outstripping its official targets.
TVNZ today declared a $9 million dividend for the 2017 financial year, down from $13.4 million in the 216 financial year, reflecting the impact of the writedown.
The improved result reflected a combination of 1 percent growth in total revenues from traditional and online broadcasting to $170.4 million for the half-year, and a 2 percent decline in operating expenses, at $140.1 million, following restructuring in the previous financial year.
The company's TV linear broadcasting audience - traditional TV - rose to a five year high during the period and there was 16 percent growth in streaming of on-demand TVNZ content.
"TVNZ plans to build on its current business momentum by growing its share of TV, accelerating growth of on-demand and is actively exploring adjacent market opportunities to fund its future growth," said chief executive Kevin Kenrick in a statement.
"Over time, TVNZ will tilt its content investment more towards local content" as this was its "strategic focus and competitive advantage" in a market "increasingly contested by global scale international players".
While direct competitor MediaWorks, owner of the TV3 network, is lobbying against the new government's plans to expand news services by RNZ, TVNZ's statement today made no mention of the initiative.