News Corp proclaimed a “sterling” start to its 2024 financial year with its total revenues growing one per cent and its segment EBITDA growing four per cent.
That growth was driven by four and eight-per cent bumps in revenue for Dow Jones and its book publishing arms. The book publishing arm, in particular, saw a 67 per cent improvement in its EBITDA (or earnings before interest, tax, depreciation and amortisation).
REA Group, News Corp’s digital real estate arm, saw its in-quarter revenue drop by US$18 million (AU$28.3 million) or four per cent year-on-year. Segment EBITDA in the quarter increased US$3 million (AU$4.72 million), or three per cent, compared to the prior year, primarily due to higher revenues at REA Group and cost savings initiatives at Move.
News Corp’s SVOD services saw revenues decrease US$16 million (AU$25 million) or three per cent. This was despite higher revenues from Kayo and BINGE, driven by increases in both volume and pricing. At the end of September, Foxtel and BINGE had almost 4.6 million paid subscribers, up two per cent from the previous year.
“We had a sterling start to the new Fiscal Year, with rising revenues and increased profitability despite difficult economic conditions in some of our markets. Our first quarter revenues were slightly higher at US$2.5 billion (AU$3.93 billion), while our profitability rose four per cent, marking the second consecutive quarter of profit growth,” said the company’s chief exec Robert Thomson.
“Our positive performance in the quarter follows the three most profitable years since the creation of the new News Corp. In our view, these results certainly highlight the disparity between the value of our company and our share price, which we believe does not reflect our present profitability, yet alone the potential of our incomparable, growing businesses.
“The quarter particularly highlighted the prowess of Dow Jones, led by its professional information business, where revenues surged 14 per cent, driven by Risk & Compliance and Dow Jones Energy. Book Publishing reported a 67 per cent increase in profitability, with the logistical issues at Amazon resolved, and both the frontlist and backlist performing”.
However, News Corp’s News Media arm did not fare quite so well. Revenues in the quarter decreased US$5 million (AU$7.86 million), or one per cent, as compared to the prior year, primarily driven by lower advertising revenues.
Revenues at News Corp Australia decreased seven per cent driven by a five per cent negative impact from foreign currency fluctuations and lower advertising revenues. Advertising revenues decreased US$10 million (AU$15.73 million), or five per cent, compared to the prior year, primarily due to lower print and digital advertising at News Corp Australia.
Digital revenues represented 37 per cent of News Media segment revenues in the quarter, compared to 36 per cent in the prior year, and represented 35 per cent of the combined revenues of the newspaper mastheads.
Closing digital subscribers at News Corp Australia at the end of September stood at 1,049,000 (937,000 for news mastheads), compared to 1,012,000 (929,000 for news mastheads) in the prior year.
“We are actively working to make the most of our premium content for AI and are engaged in advanced discussions that we expect to bring significant revenue to the company in return for the authorized use of our peerless content. Our quest is to maximise value for all investors, so we are assiduously reviewing our structure,” added Thomson.
