A tough advertising market has pulled down Nine Entertainment’s revenue and profits in the December half, which the company was able to partly offset with strong subscriber growth at its video streaming and publishing businesses.
Revenue fell 2 per cent to $1.38 billion in the six months to December 31, the media company said in a statement to the ASX on Thursday. Net profit slumped 40 per cent to $113.8 million, dragged down by significant items such as impairments for TV content and restructuring costs. Excluding those charges, profits were down 21 per cent to $149.5 million.
Nine chief Mike Sneesby pointed to the strong performance of the company’s subscription services.
While the company had to face the broader economic challenges during the half, Nine chairman Peter Costello said he was pleased with its response. “We have enhanced our competitive position,” he said. “We are well positioned for the future. The breath of our different businesses has proved its worth in these conditions.”
Chief executive Mike Sneesby pointed to the performance of the company’s subscription services – its Stan streaming platform and its publishing business – where subscription and licensing revenues together increased by about 8 per cent to now generate more than 30 per cent of Nine’s revenue.
He encouraged the government to give “urgent attention” to the status of the News Media Bargaining Code, with the media landscape having evolved significantly since the legislation was drafted. The government needs to ensure media companies are fairly compensated for the ways in which global digital use their content, Sneesby said.
“For example, Nine’s premium video content continues to drive huge audiences on social media platforms, while we are also witnessing the rapid growth in generative-AI services, which utilise our public interest journalism to build and train their models.”
News Corp’s chief executive Robert Thomson told investors this month the company was in advanced stages of negotiations for content deals with major digital firms.
In line with market trends, Nine’s broadcast division, which houses the Nine Network, broadcast video on-demand service 9Now and the radio division including 2GB and 3AW, was hit by a slump in advertising demand, which sent its revenue down 9 per cent in the December half. While costs remained stable, its earnings before interest, tax, depreciation and amortisation (EBITDA) fell 27 per cent to $163.7 million.
Streaming service Stan was again the top performer, with EBITDA jumping 41 per cent to $25.3 million. Revenue was up 11 per cent to $228.4 million, which the company put down to its growth in paying subscribers, which now stand at more than 2.2 million.
Revenue in Nine’s publishing division, which houses The Sydney Morning Herald, The Age, and The Australian Financial Review, alongside nine.com.au, Drive and Pedestrian Group, was down 4 per cent to $228.7 million. EBITDA dropped 19 per cent to $77.8 million, hit by a soft advertising demand.
Streaming service Stan was Nine’s top performer.
Nine said the core metro business, which includes the mastheads, “markedly outperformed” the rest of the publishing division, with total subscribers across its mastheads up 7 per cent to 480,000.
Nine’s digital real estate business Domain delivered its results last week, growing revenue by 11 per cent. Nine said this was owed to a stronger housing market, particularly in Melbourne and Sydney, which helped lift EBITDA up 16.6 per cent to $68.4 million.
The company declared an interim dividend of 4 cents a share, fully franked, payable on April 18.
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