- Share of Australian free-to-air advertising market to drop
- Viewer numbers fell short of expectations, Nine says
Nine Entertainment Co. sank the most since its 2013 listing after saying viewer numbers fell short of expectations and Australia’s free-to-air advertising market is set to shrink.
The stock plummeted 21 percent to A$1.195 at 11:38 a.m. in Sydney, valuing the Australian television broadcaster at A$1.05 billion ($798 million).
Nine’s programs attracted smaller audiences than anticipated in the first three months of 2016 and the advertising market remained “subdued,” the Sydney-based company said in a statement Tuesday.
“People are reading into it that the reality is worse than they said,” said Brian Han, an analyst at Morningstar Inc. in Sydney. “Even a bit of a top-line drop can be magnified at the bottom line. It’s been a really bad start for them.”
Australia’s free-to-air advertising market is now expected to record a “low single-digit” percentage decline in the year ending June, compared with previous expectations of “flat to down marginally,” Nine said. The company said its share of the market will be around 37 percent in that 12-month period. The previous year, the figure was 39 percent.
Nine’s mainstay cricket coverage has been particularly affected because about 30 percent of scheduled play was lost due to bad weather, the company said. Nine competes with domestic rivals Ten Network Holdings Ltd. and Seven West Media Ltd., which declined 1.3 percent and 11 percent respectively Tuesday.
Nine will release full-year results on Aug. 25.