Television New Zealand 1st-half profit drops 5% on weaker ad revenue

Television New Zealand, the state-owned broadcaster, posted a drop in first-half profit of about 5 percent as advertising revenue weakened and costs rose.

Profit fell to $19.8 million in the six months ended Dec. 31, from 20.8 million a year earlier, the Auckland-based company said in a statement. Advertising sales, which make up 88 percent of the TV company's operating revenue, fell to $171.9 million from $177 million.

Total sales dropped 3 percent to $195.6 million, while operating expenses climbed to $164.3 million from $163.96 million.

TVNZ dominates free-to-air broadcasting in New Zealand, and had all 20 of the top 20 most watched shows in the first half. In the first-half, its market share widened to 61.6 percent from 60.9 percent, it said. Still, growth in digital media and an increased shares of TV ad sales were enough to offset the impact of weaker advertising and the timing of some costs, leading to the decline in earnings.

"In common with other media groups, TVNZ's advertising revenue was down following softer demand in the six months," it said.

The company said it is on track to achieve its full-year financial targets, which are for operating revenue of $358.8 million and comprehensive income of $23.4 million.

The broadcaster's ONE News show was the nation's most-watched TV programme, drawing an average audience of more than 650,000 viewers. Its Sunday current affairs show had an average audience of more than 600,000, it said.

The first-half results included an unrealised net foreign exchange loss of $3.6 million. The first-half of the previous year had a similar sized-one-time charge of $3.2 million as an impairment against property, plant and equipment.