TVNZ’s half year results
TVNZ has recorded a 136% improvement in Operating Earnings for the six months to December 2010.
Operating earnings of $33.5 million, up from $14.2 million for the same time last year, reflects strong advertising revenue and share growth and continued cost management discipline.
Chief Executive Rick Ellis says it is one of the best half year Operating Earnings results in recent times, and positions the company well for the full financial year.
Television advertising revenue for the half year was $163.0 million. This is an increase of $12.1 million (8.0%) on the same time last year, and exceeds the total television advertising market growth for the same period (7.6%).
The Advertising Standards Association (ASA) last week released the NZ advertising industry turnover figures for 2010. The Television industry recorded an increase in share from 27.9% to 28.4% and an increase in value of 6.5%. TVNZ has been the primary driver and beneficiary of this growth.
Mr Ellis says the company has had some notable successes during the half year.
By December, ONE News had achieved its ninth consecutive month of year on year audience share growth, and on the way had picked up the Qantas Award for Best News for an unprecedented third year in a row. In total, TVNZ won eight of the 11 News and Current Affairs awards.
TVNZ’s online service was also acknowledged when tvnz.co.nz was voted Best Media Site, against key competition, at the People’s Choice NetGuide Web Awards for 2010.
The after tax profit was $4.9 million, compared with $8.9 million in the same period the prior year. This result is after recognition of a one-off non-cash accounting adjustment of $14.8 million relating to share of losses and impairment of investment in Hybrid Television Services.
Mr Ellis says Hybrid faced an extremely competitive market in Australia and operating margins could not be sustained. Accounting convention required a non-cash write down of TVNZ’s 33% investment in Hybrid and an impairment of advances to associate.
He says from a consumer perspective the TiVo PRV distributed by Hybrid continues to provide exceptional value to consumers at the current price point, with independent analysis showing it continues its lead in the Australian market, well ahead of competitors.
He says the impairment of TVNZ’s investment in Hybrid does not impact the operation or service for existing and new TiVo users.
TVNZ generated operating cash flows of $32.3 million, up from $20.4 million for the same time last year. The company’s low debt position and balance sheet demonstrates its strong solvent position.
However Mr Ellis said the company’s celebration of its positive news was tampered by two events in the first half of the financial year that profoundly affected all New Zealanders – the Pike River mine disaster and the first Christchurch earthquake, the precursor to something even worse.
Beyond the tragedies themselves, those disasters reinforced the role TVNZ plays in informing and bringing the country together and were a potent reminder to every member of the company of the responsibility and importance of what TVNZ does.
Financial Highlights Summary – Six months ended
|Financial Instruments/foreign currency gains||(978)||(307)|
|Share of results and impairment of Associate||(14,771)||(424)|
|Income Tax expense||(8,819)||(4,065)|
|After Tax Profit||4,887||8,869|
|Operating Cash Flow||32,322||20,427|