Lower advertising sinks Nine’s profit
Nine Entertainment has warned dented advertising markets caused by the COVID-19 downturn have significantly impacted Australia's commercial media industry.
The major media group said conditions remained challenging through the start of financial year 2021, with expected revenues from free-to-air television in the first quarter down by roughly 15 per cent.
Releasing its 2020 financial year results, Nine posted a statutory loss of $590 million, largely from writedowns in the value of the company's goodwill.
Its profit after tax from continuing operations dropped 17 per cent to $155.9 million.
Nine chief executive Hugh Marks said its investments in digital services such as 9Now and Stan had sheltered it from the worst of the impacts induced by the pandemic.
"2020 was no doubt a challenging year," he said.
"Digital video consumption and subscriber revenue in particular have grown significantly across the period, while digital advertising markets have improved more quickly as we trade through the worst of the COVID crisis."
Nine said its digital-based video and publishing services contributed around 48 per cent of the group's earnings.
The company expects ongoing subscriber growth within Stan, which has a membership base of 2.2 million users.
Nine's group earnings for the 2020 financial year dropped 16 per cent, or $69.2 million, to $354.6 million. Earnings in its broadcast division fell 35 per cent.
Group revenue dipped 7 per cent, or 170.2 million, to $2.17 billion, while the company's net debt position stood at $291 million at June 30.
Mr Marks said in response to the downturn, the company had removed $225 million in short-term cash costs for the 2020 calendar year and is planning a further long-term cost cut of $230 million
"The current market conditions have only given greater cause to continue to evolve the positioning of our business," he said.
"We will continue to drive growth in our increasingly prominent digital businesses while, at the same time, maximising the performance of our traditional media assets."
Nine reported a 20 per cent growth in digital subscriptions for its print publications.
Originally published as Lower advertising sinks Nine's profit