TVNZ defies ‘tectonic shifts’ to post $28.1m profit

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TVNZ has reported a net profit after tax of $28.1 million for the year ending June 2015, up $10 million on the prior year.

TVNZ ceo Kevin Kenrick says the year’s financial results are particularly encouraging given the tectonic shifts currently occurring in the media industry.

“It’s been a good year for TVNZ – we’ve grown share of the TV market, upgraded and re-launched online services, TVNZ OnDemand and ONE News Now, and strengthened year-on-year financial performance.

“TVNZ grew its share of prime time TV audiences off the back of strong performances from news and current affairs programmes,” Kenrick said. “ONE News, Seven Sharp, Sunday, and Fair Go all achieved strong year-on-year growth, and by year end the leadership gap between ONE News and its nearest competitor, was the greatest it has been in 10 years.”

The year saw 97 seven million online video streams delivered with TVNZ OnDemand streams up 27% and ONE News Now up 44%. Customer registration was introduced at the time TVNZ OnDemand was re-launched and 650,000 registered users had signed up by year end.

Total revenue declined 2.9% year-on-year to $350.0 million, with total advertising revenue down 1.9%.

Kenrick says TVNZ strengthened its share of TV advertising revenue, however share growth in TV and 19% year-on-year growth in online revenues were insufficient to fully offset overall softer market demand for TV advertising.

Total expenditure declined 3.7% to $313.7m with year-on-year cost savings achieved across all major cost lines including programming, labour, marketing, depreciation and transmission/technology/telecommunications.

TVNZ’s operating earnings increased by 3.8% and, after excluding gains on sale of property, plant and equipment, underlying earnings increased year-on-year by 13%.

Kenrick says overall financial performance for the year was characterised by softer demand for TV advertising, encouraging growth in online advertising, and continued focus on tighter cost management.

“While TVNZ is performing well relative to domestic media competitors, the competition for viewer eyeballs and advertising dollars is increasingly being driven by global scale players.

“Key areas of focus for the year ahead include continuing to grow share of TV versus local competitors, driving online growth versus global competitors, building capability to future-proof the business, and identifying options to sustain the business beyond today.”

The board has declared an operating dividend of $8.3 million from the FY2015 operating result.

Financial Highlights Summary – Year Ended 30 June 2015:

FY2015 (+$000) FY2014 (+$000)
Revenue & Income 349,992 360,585
Advertising Revenue 313,523 319,732
Operating Expenses 313,676 325,603
Operating Earnings 36,316 34,982
Interest Expense 92 249
Asset Impairmment/Remediation Reversal 486 3,188
Financial Instruments 912 167
Share of results of Associates/impairment  0  0
Income Tax 8,535 6,925
Net Profit After Tax 28,115 18,111

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