State-owned TVNZ trims dividend as programming costs rise
BUSINESSDESK: State-owned broadcaster Television New Zealand paid a smaller-than-expected dividend to the government as more-expensive foreign programming eroded the company's underlying earnings.
The broadcaster paid a dividend of $11.3 million in the 12 months ended June 30, down from $13.8 million last year and smaller than the $12.8 million forecast in its statement of corporate intent. Underlying earnings shrank 12% to $27.9 million, slightly ahead of the $24 million forecast.
Net profit surged to $14.2 million from $2.1 million after the impact of the ill-fated TiVo venture washed through the broadcaster's books, just ahead of the $14.1 million forecast in the statement of intent.
"Increases in the cost of television programming, particularly overseas programming, were the primary driver of lower underlying earnings," the company says.
The broadcaster's operating revenue grew 1% in the year to $381.8 million, with a 3% lift in advertising sales to $313.7 million.
The company increased its TV advertising share to 62.2% from 61.6%, nabbing 92% of total growth in the period, it says.
TVNZ's more-expensive overseas programming comes as the kiwi dollar's strength increases local buyers' purchasing power and at the same time as rival MediaWorks NZ winds down its reliance on CBS Broadcasting in favour of New Zealand-made content.
The broadcaster took a $5.7 million impairment charge on the cost of switching off the analogue transmission network.