Nine Entertainment has revealed that its first-half earnings will be down by 10 per cent.
The network blamed the results on slow market condition and the Alan Jones advertiser boycott, as well as a “shift in earnings contribution” attributed to the Fairfax merger.
“The current advertising market conditions will mean that our first half result is now expected to be approx. 10 per cent down on pcp (prior corresponding period),” company CEO Hugh Marks said.
But Nine does not expect the pain to last too long.
“Notwithstanding, with the expectation of growth in linear FTA share, further growth in 9Now and Stan, a pick-up in activity at Domain and early synergies from Macquarie Radio, we are expecting this shortfall to be more than made up in the second half,” Marks said.
Having finalised the merger with Macquarie Radio just last Friday, incidents like the Alan Jones controversy will now have a greater impact on the company’s bottom line.
“Radio has experienced similarly soft market conditions in the current half exacerbated for Macquarie by the advertiser boycott around the Alan Jones’ program on 2GB,” Marks continued.
“We are confident that full ownership by Nine from November will underpin improved performance, both in terms of reduced costs and the potential for incremental revenue on a medium-term basis.”
Nine’s Metro FTA business achieved a leading revenue share of 39.8 per cent, in a market that was down 6.4 per cent on last year.
For digital, Nine claimed its 9Now service now has close to a 50 per cent share in the BVOD market, while subscriber service Stan “is performing ahead of expectations on all metrics, including profitability and cashflow”.
“Stan has had a fabulous year. More than 1.7m subscribers at year end after an incredibly strong year for adds,” he said.
“Stan’s aggregated content from around 50 different studios as well as its own local commissions, has driven this success story – a growing, digital business which has moved through break-even and has been profitable and cash flow positive each month since March.”
Online property listing portal Domain, on the other hand, had a “challenging year”, culminating in a 15 per cent drop in Domain’s EBITDA in FY19.