Seven West Media (SWM) has reported a massive 91 per cent decline in profits for the first half of the 2017 financial year due to write-downs and a weak advertising market.
SWM reported a statutory net profit of $12.4 million in the six months to 24 December 2016, compared to the $132.2 million profit it made during the previous corresponding period.
The company blamed the dour profit result on a write down in the value of Yahoo7, the sale of on-demand movie channel Presto and the Australian News Channel, and the sale of Pacific Magazine’s youth titles.
SWM’s revenue rose 1.4 per cent on the previous corresponding period to $905 million, while the dividend for shareholders will be kept at two cents, compared to four cents in the first half of the 2016 financial year.
The company’s stock is down 5.8 per cent to $0.735 cents and is expected to head lower.
Looking at each of SWM’s businesses, Seven’s advertising revenue grew 4.6 per cent in the first half of the 2017 fiscal year to $648.7 million, while total revenue was up 5.4 per cent for the TV network to $698.9 million.
SWM’s newspaper business, The West, posted a 15.8 per cent growth in ad revenue to $65.7 million, while its total revenue fell 10.7 per cent to $108.5 million.
Its magazine arm, Pacific, unsurprisingly recorded a significant decline in ad revenue – down 22.5 per cent to $15.4 million, with total revenue down 13.3 per cent to $91.9 million.
The overall results make matters worse for SWM, which is already dealing with the ongoing saga between Seven CEO Tim Worner and his former mistress, Amber Harrison.
Commenting on the results, Worner said the company was delivering on a successful strategy that provides it with a “clear, continuous and sustainable” growth plan for 2020 and beyond.
“We will continue to build our businesses, manage our costs, grow our content production capacity, and deliver that content wherever the audience wants to consume it and wherever we can monetise it,” he said.