Nine Entertainment Net Profit Slumps 9%
Nine Entertainment has released its finances for H1 FY20, outlining its results from the months since December last year.
Lead takeaways from the report were the decline in profits – where net profit after tax came in at $115 million, a slump by 9 per cent, alongside a drop in Group EBITDA by 8 per cent, coming in at $231 million.
However, CEO Hugh Marks, reports ‘Nine is in a unique, and incredibly exciting position,’ with the media juggernauts ownership of digital, broadcast, radio and print media.
‘This result is a testament to the work we have done over the last four years to reposition Nine for a digital future. With strong growth in our digital businesses helping to offset some of the cyclical headwinds faced by our traditional media assets,’ Marks said.
‘We have successfully unified our first party database across all of our owned and controlled businesses, meaning we are in a position to offer our partners the benefits of more targeted advertising across the Nine suite of assets.’
Marks also noted that the company’s investment in 9Galaxy, a platform that automates the buying and selling of Nine’s TV inventory and uses proprietary predictive modelling technology to predict television audiences, positioned them to ‘compete more effectively with the global technology companies for revenue.’
Advertising revenue is quickly dropping in value for traditional media during a time when companies are increasingly selecting digital platforms to attract consumers.
But he also acknowledged there was more work to do in refocusing the costs of their FTA business, in a move looking to shed up to $100 million in annualised costs over the next three years.
‘Recognising this company-wide evolution, we believe there is significant potential to refocus the cost structure of our FTA business, targeting the removal of up to $100m in annualized costs over the next 3 years – costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video, as we have done successfully over the past 3 years,’ Marks said.
He finished by noting the company’s competitive position with digital platforms and its ability to attract mass audiences.
‘Almost 40% of our earnings are now sourced from growing digital platforms. Together with data and technology, we have the ability to distribute messages to mass audiences as well as to small but valuable, addressable audiences.’
The results come after Nine Entertainment acquired Fairfax Media and Stan from 7 December 2018, which saw the company take hold of The Sydney Morning Herald and The Age.
Net profits after tax and minorities were also down 9 per cent on the H1 FY19 result, slumping to $115 million. Earnings per Share of 6.7 cents also declined 9 per cent on the previous corresponding period.
You can view Nine Entertainment’s full financial report here.