Nine Entertainment has outlined plans to wipe A$100 million in annualised free-to-air costs over the next three years, as a weaker than expected advertising market hits the company’s bottom line.
The publicly-listed media company reported that net profit after tax for the six months to December 31 had slid 41 per cent to $101.86 million.
However, the group’s revenues for the half-year increased by 65.7 per cent to $1.18 billion.
Nines Chief executive, Hugh Marks, has announced the company will target the removal of one-off sporting events such as the Ashes and Cricket World Cup to cut down on costs.
Marks told The Australian that these were “costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video.”
Nine has posted strong growth in its digital video businesses, with 40 per cent of Nine’s earnings now coming from growing digital platforms.
Streaming service Stan increased revenue by 79 per cent to $116.6 million as subscribers passed the 1.8 million mark, while on-demand service 9Now experienced 65-per-cent growth in Ebitda.
“We have invested in technology through 9Galaxy which will enable our inventory to be traded seamlessly, and in a premium content mix that works across linear and on-demand television, positioning us to compete more effectively with global technology companies for revenue,” Marks said.
“Recognising this company-wide evolution, we believe there is significant potential to refocus the cost structure of our FTA business, targeting the removal of up to A$100m in annualised costs over the next three years – costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video, as we have done successfully over the past three years.”
Nine announced a fully-franked half-year dividend of five cents per share, the same as last year.