Photo: RNZ/Calvin Samuel
Television New Zealand has turned a profit in the first half of the financial year, though the second half is expected to be hit by further drops in television advertising revenue and additional tech costs, with potential for a full-year loss.
The state-owned broadcaster made a net profit of $53.1 million for six months ended December, compared with a loss in the year earlier, though the result included a non-cash adjustment of $41.3m to remove costs already accounted for in the year earlier loss.
Otherwise, TVNZ made an underlying profit of $11.8m, with a 1.9 percent decline in revenue to $152.7m.
A drop in television advertising revenue was in contrast to a 16 percent year-on-year increase in digital revenue, accounting for about 25 percent of total revenue.
"This is an encouraging financial performance for the business. While the advertising market remains challenged, we've worked hard to shore up our revenue pipeline and reduce our costs," TVNZ chief executive Jodi O'Donnell said.
"Today's result puts us in the best possible position to advance our digital strategy and deliver on our aspiration to be New Zealand's number one streaming platform of trusted news, sport and entertainment."
TVNZ chief executive Jodi O'Donnell. Photo: Supplied / TVNZ
She said the result reflected efforts to stabilise revenue and adjust TVNZ's costs, with operating expenses of $143.5m down $19.6m down on the year earlier.
"Savings were achieved primarily through a reset of organisational structure, and a reduction in content, technology and marketing costs," O'Donnell said.
TVNZ was in the first year of its five-year digital+ strategy, with an aim of doubling TVNZ+'s 18-54 audience, tripling digital advertising revenue and creating a sustainable operational model.
"Audiences are changing, and we have a plan in place to meet their needs today and into the future," O'Donnell said.
TVNZ was forecasting an underlying profit somewhere between $5m and a loss of $5m for the full year, as television advertising tended to drop in the second half, as well as ongoing market volatility and some unpredictability around the phasing of investment in technology.
She said the full year result may include a non-cash impairment given a forecast drop in future earnings would have on its asset valuation.
"While the market remains challenging, the initiatives delivered have supported TVNZ in reaching a stronger position, enabling the business to execute its strategy and secure its digital future.
A full set of TVNZ's interim accounts will be available in early March.
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