TVNZ profit halves as ad revenues slide

Television New Zealand’s half-year profit has more than halved to $8.9 million and the state owned enterprise predicts a full-year loss as advertising revenue continues to decline.

TVNZ said today net profit for the six months to December 2009 fell by $9.4 million, or 51 percent, to $8.9m from $18.3m in the same period of 2008.

Chief executive Rick Ellis said television advertising revenues for the half-year fell by 12.7 percent, or $22.2m year-on-year to $152.3m. Total operating revenue dropped 16.6 percent to $186.9m.

Ellis said while cost cutting had offset some of the impact of revenue declines, TVNZ needed to continue seeking ways to reduce its on-going cost structure to the revenue realities of the post-recession era. Group operating expenses fell $23.73m to $172.8m.

It was likely the full-year results would show a loss, added Ellis.

“There are a number of strategic reviews underway across the business as the company looks to further reduce costs, and to make the transition from an analogue broadcaster to a digital television and media company. These will be substantially completed by the end of the fiscal year,” Ellis said.

TVNZ's annual result last year saw an 89 percent drop in profit to $2.1m with the Government's annual dividend cut 70 per cent cut to $1.47m.

- © Fairfax NZ News