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TVNZ boosts first-half profit jumps 47% as ad revenue recovers, writes off Igloo investment

Television New Zealand, the state-owned broadcaster, boosted first-half profit as advertising revenue gained and operating costs fell, and has written down the value of its investment in a joint venture with pay-TV operator Sky Network Television.

Net profit rose to $20.8 million in the six months ended Dec. 31, from $14.2 million a year earlier, the Auckland-based state-owned enterprise said in a statement. Operating revenue rose 3 percent to $201.9 million, with a 2.4 percent lift in TV advertising sales to $171.5 million and a 23 percent gain in digital revenue to $6 million.

"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," chief executive Kevin Kenrick said. "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."

The state-owned broadcaster, which is investigating staff using its facilities to host a political meeting, anticipates a net surplus of $16.8 million in the 12 months ending June 30, 2014, on revenue of $357.3 million, according to its latest Statement of Intent.

In September, TVNZ reached an agreement with shareholding ministers Craig Foss and Bill English to forgo dividends to allow the broadcaster to spend the proceeds of a property sale to SkyCity Entertainment Group on refurbishing its Victoria St West building and upgrading its online technology.

The broadcaster recognised an impairment of $3.2 million on property, plant and equipment, and a $6.1 million impairment and loss from its associates, saying it wrote down its remaining investment in its Igloo stake due to the uncertainty of the timing of future profits from the set-top box offering with Sky TV.

Last year TVNZ told Parliament's commerce select committee it may have to wait up to six years before their Igloo budget pay-TV service gets into the black.

(BusinessDesk)