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Nine's strong ratings drives profit growth

Simone Ziaziaris  |  22 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Strong ratings and a dominant share of the free-to-air TV revenue market have driven a 55 per cent increase in Nine Entertainment's (ASX: NEC) half-year underlying profit.

The Nine Network owner said overall free-to-air advertising spending rose for first time in more than two years in the six months to December, and its share of that revenue increased to 40 per cent.

The company's profit after tax, excluding one-off items, was $116.2 million in the period, up from $75 million a year earlier.

Its net profit, which included profit on the sale of Nine's Sydney headquarters, was $174 million, an improvement on a $237 million loss in the prior corresponding period when the broadcaster wrote down the value of its free-to-air television business.

Shares in Nine Entertainment were up 30.5 cents, or 18 per cent, at a two-and-a-half year high of $2.005 at 1120 AEDT.

Chief executive Hugh Marks said it was a strong half year across the entire business.

"Television is changing but it presents big opportunities for those who can adapt and we at Nine are leading that change," he told analysts.

"We will continue to invest in our future--there is much work still to do but as can be seen from these results, the benefit to our shareholders is becoming increasingly clear."

Nine expects its strong ratings performance to continue in the second half of the financial year, and its revenue share to be higher than in the same period a year ago, though it said that growth will be limited by the impact of the Winter Olympics and Commonwealth Games on rival Seven Network.

Nine's digital business, which includes its 9Now on-demand streaming service and websites including PedestrianTV and CarAdvice, also posted revenue and earnings growth in the first half.

Mr Marks said streaming service Stan, a joint venture between Nine and Fairfax Media, is beginning to approach the break-even mark after three years of losses.

Stan now has around 930,000 subscribers, and its revenue in the half was up 83 per cent from a year ago.

NINE SWINGS BACK TO PROFIT

* Half year net profit of $174m vs $236.9m loss

* Revenue up 9pc to $723.85m

* Fully franked interim dividend up 1 cent to 5 cents

 

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is an AAP journalist.

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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