Seven West Media Posts First-Half Loss on Writedown
Seven West Media Ltd., Australia’s most watched television broadcaster, reported a first-half loss after making A$261 million ($270 million) of charges including writing down its magazines and online venture with Yahoo! Inc.
The net loss was A$109 million in the six months ended December, compared with net income of A$163 million a year earlier, Perth, Australia-based Seven said in a statement today. Excluding one-time items, first-half profit declined 13 percent to A$142 million. The shares fell the most since June, dropping 7.1 percent to close at A$2.34 in Sydney.
Stalling advertising is crimping earnings even as the company tops television ratings with programs including Australian Football League matches and the soap opera Revenge. The loss was the first reported by the company since the 2011 combination of billionaire Kerry Stokes’s Seven television network assets with West Australian Newspaper Holdings Ltd., publisher of Perth’s sole daily.
“Advertising markets remain subdued,” Macquarie Group Ltd. analysts wrote in Feb. 5 note to clients.
Seven West stock has gained 43 percent this year compared with a 9.7 percent advance for the benchmark S&P/ASX 200 index.
Stokes is chairman of Seven West as well as its biggest shareholder Seven Group Holdings Ltd.
The advertising market will “continue to trend below previous year in the near term,” the company said in a presentation. Television will post “flat to single-digit growth,” it said.
First-half earnings before interest and tax from TV fell 12 percent to A$186 million.
Seven’s evening news program, cooking show My Kitchen Rules and drama Revenge were among the top five most-watched programs in the latest ratings report by industry monitor OZTam. Seven’s three free-to-air channels had about a 35 percent share of the Australian television audience.
“Our businesses are performing well in what is a challenging market,” Chief Executive Officer Don Voelte said in the statement.
Newspaper earnings dropped 27 percent to A$49 million while profit at the magazine unit declined 25 percent to A$17 million.
The company took a A$195 million writedown of brand values, licenses and goodwill to the unit, whose titles include Home & Lifestyle and Fashion. Another A$60 million impairment was made to its joint-venture Internet portal with Yahoo.
Seven reduced its net debt to A$1.26 billion in the period after raising A$432 million in cash by issuing new stock.
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