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STRONG LIFT IN TVNZ HALF YEAR EARNINGS


27 February 2014

STRONG LIFT IN TVNZ HALF YEAR EARNINGS

TVNZ has posted a net profit after tax of $20.8 million for the six months to 31 December, up 47% on the same period last year.

Excluding gains on the sale of property, the company has recorded a strong lift in operating earnings at the half year mark, up 40% to $30.1 million.

Announcing the company's "encouraging" interim result today, Chief Executive Kevin Kenrick said: "The highlight of our half year result is the strong growth in operating earnings, fuelled by increased advertising revenue and a 10% reduction in non-programming costs."

Lifts in both TV and digital ad income contributed to topline revenue growth of 3%. TV advertising revenue was up 2.4% to $171.5 million, and digital revenue was up 23.3% to $6.0 million.

"TV continues to be the nation's favourite pastime with the average kiwi watching three hours of TV per day," Mr Kenrick said. "TV ONE and TV2 bring in the biggest audiences, with TVNZ airing 18 of the top rating 20 programmes for the period."

New Zealand's Got Talent was the country's most watched entertainment show during this time, ONE News was New Zealand's most watched news and Sunday was the most watched current affairs programme.

Mr Kenrick said the company is reaping the rewards of its investment in digital media. TVNZ Ondemand set a record 4.7 million streams for the month of October. It regularly attracts a million streams per week, and its mobile app has now topped half a million downloads.

"One of the real success stories for this period has been the performance of TVNZ Ondemand - which is a huge hit with both our viewers and advertisers. Total streams for the half year are up 88%."

In a sign of things to come, TVNZ's increasingly integrated approach to on air and online content was seized upon by viewers. "Our content now follows viewers from location to location, from their TV screens to their desktops, their smartphones to their tablets. Coverage of the 2013 America's Cup in September was a great example of this kind of on air and online integration. At its height, TV viewing peaked at 1.2 million on TV ONE and live streaming topped a quarter of a million people on onenews.co.nz."

As a result of the uncertainty of the timing of future profits by Igloo, in which TVNZ holds a minority shareholding, the company has decided to impair its remaining investment in Igloo.

"TVNZ's half year results are encouraging and we expect our strong slate of new season content will ensure we achieve if not exceed our full year Statement of Intent forecast," he said.

Financial Highlights Summary - Six months ended

 31/12/13  31/12/12
 000's  000's
   
Operating Revenue 201,935  193,861
Television revenue 171,482  167,544
Digital media revenue 5,976  4,848
   
Operating Expenses (163,955)  (172,290)
   
Operating Earnings 37,980  21,571
   
Interest Expense (198)  (616)
   
Financial Instruments/foreign currency gains 164  221
   
Impairment of property, plant and equipment (3,188)  0
   
Share of Associates results/impairment (6,060)  (938)
   
Income Tax expense (7,853)  (6,010)
   
After Tax Profit 20,845  14,228
   
Operating Cash Flow 33,881  13,676