Nine Entertainment Co reports revenue, profit up as better ratings turn into sales

‘This was a strong half for Nine, across our entire business’

Nine Entertainment Co has reported its financial results for the six months ending December 31 2017.

The Company reported revenue of $720m (+9%), Group EBITDA of $181m (+51%) and net profit after tax of $116m (+55%).

Statutory results included $58m after tax, primarily the profit on the sale of Nine’s Willoughby site. Net profit after tax, inclusive of specific items, was $174m.

Highlights for the period include:

• Improved ratings performance – 25-54s network share of 39.5%
• #1 revenue share for the half of 40.0%, up 5 points
• #1 revenue share for the calendar year of 38.3%, up 3 points
• 80% growth in long-form streams resulting in 86% growth in revenue at 9Now
• 6% growth in revenues at refocused digital publishing business
• Around 930,000 active subscribers at Stan, growth of 33%

Hugh Marks, chief executive officer of Nine Entertainment Co., said:

“This was a strong half for Nine, across our entire business. Positive FTA TV ratings momentum combined with our focus on the 25-54 demographic is translating to improving revenue share.

“In digital, 9Now is experiencing strong revenue growth and our digital publishing business has strong growth in premium revenues in line with our future strategy. Finally, Stan is now approaching break-even and looking to further consolidate on its leading local position in this market.

“We are the only Australian media business with this unique set of video-based assets, combining the enduring strength of FTA TV with high-growth businesses in each of BVOD, SVOD and digital publishing. Nine’s strong cash flow and relatively ungeared balance sheet gives us the confidence to continue to prudently invest in our future across these four businesses.

“Nine’s strengths lie in premium content and therein is the opportunity – to harness the growth in viewing across different platforms and distribution models, and optimise the total return on our content spend. We will continue to invest in our future – there is much work still to do but as can be seen from these results, the benefit to our shareholders is becoming increasingly clear.”

During the period, Nine’s ratings continued to improve.

For the six months to December, Nine attracted a commercial network share of 39.5% of the 25-54 demographic (up 3.6 points) and a #1 share in all the key buying demographics as well as all people.

For the primary channel, Nine’s share of the 25-54s was 40.7%, almost seven points ahead of its nearest competitor and a clear #1 share across all key demographics.

For ratings season 2017, Nine Network won all the key buying demographics, and recorded growth of around 2-3 points on season 2016.

Highlights in the second half included the breakout performance of Australian Ninja Warrior and the enduring dominance of The Block.

This improved ratings performance has begun to translate to revenue share.

For the six months to December, Nine’s metro FTA revenue share was a 13-year high of 40.0%, which brought the CY17 total to 38.3%, up three points on CY16. Nine was the number one metro FTA network in terms of calendar year revenue share for the first time since 2005.

For the 6 months to December 2017, Nine digital recorded a revenue increase of 7%, underpinned by long-form video, particularly from 9Now and an increasing contribution from Pedestrian TV and CarAdvice. This growth more than offset declining revenue in the traditional display category and the absence of contribution from Bing.

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