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TVNZ Interim Result on Track

TVNZ, Auckland, 2 March 2015: TVNZ has delivered an after tax net profit of $19.8 million for the six months to 31 December.

This puts the company on track to achieve the full year financial targets set out in its 2015 Statement of Intent.

Announcing the result today Chief Executive Kevin Kenrick said the business was moving into a strong second half, leveraging recent investments in upgrading digital technology platforms to re-launch enhanced versions of TVNZ OnDemand and onenews.co.nz.

Mr Kenrick said digital media properties were continuing to perform strongly with TVNZ OnDemand video streams up 38% year on year, hitting a record in the month of October with over 6 million streams.

Buoyed by the lift in online viewing, digital media revenue rose 34% compared with the same period in the previous year.

In common with other media groups, TVNZ’s advertising revenue was down following softer demand in the six months. The company’s share of television advertising revenue grew from 60.9% to 61.6%.

Television audience share also strengthened, led by News and Current Affairs programming and peak time entertainment shows. ONE News was the most watched programme for the period with an average total audience of more than 650,000 viewers. Breakfast and Seven Sharp increased audience share over the 6 months, and Sunday was the most watched current affairs show with an average audience of more than 600,000 New Zealanders per episode.

Gloriavale – A World Apart, My Kitchen Rules and Shortland Street were the standout performers among entertainment shows.

TVNZ had all 20 of the top 20 most watched shows in the first half of FY2015.

Growth in digital media and a stronger share of television advertising revenue failed to fully offset the impact of a weak advertising environment, and together with year on year changes in cost phasing resulted in a drop in the after tax net profit to $19.8 million, from $20.8 million in the corresponding period for the previous year.

The revaluation of currency hedging held at 31 December 2014, noted in the financial report as an unrealised net foreign exchange loss of $3.6 million, had a negative impact due to the strength of the NZ dollar.

Other points of note for the six month period include:

Successful delivery of ‘first & fast’ content via TVNZ OnDemand. Ninety-five per cent of this content was delivered within one and a half hours of each show’s first international broadcast.

Transfer of TVNZ Archive to the Crown.

Delivery of Vote Compass for the 2014 General Election – over 332,000 users registered for this internationally-used electorate engagement survey.

Successful streaming of FIFA World Cup – over 800,000 streams delivered.

Selection of four independent production companies to undertake outsourcing of most TVNZ Maori and Pacific programmes commencing in the second half of the financial year.

Mr Kenrick said a continuing focus on growing share of advertising spend and on tightly managing costs puts the business on track to meet its full year financial targets in June.

Financial Highlights Summary
Six months ended 31/12/14
31/12/13 31.12.2014: 000’s 31.12.2013: 000’s
Operating Revenue 195,556 201,935
Advertising revenue 171,865 177,458
Operating Expenses (164,341) (163,955)
Operating Earnings 31,215 37,980
Interest Expense (48) (198)
Financial Instruments/
foreign currency gains/(losses)
(3,641) 164
Impairment of property, plant and equipment 0 (3,188)
Share of Associates results/impairment 0 (6,060)
Income Tax expense (7,720) (7,853)
After Tax Profit 19,806 20,845
Operating Cash Flow 40,792 33,881
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