Rio Games Rescue Prime Media

By Glenn Dyer | More Articles by Glenn Dyer

More gloom from the embattled media sector with regional free to air broadcaster, Prime Media Group (PRT) forecasting its December half-year net profit will come in between $15.3 million and $16.3 million, little changed from what the company earned in the December 2015 half.

In a trading update issued yesterday to the ASX the broadcaster said its Rio Olympic Games coverage (as Seven Network’s regional affiliate) and its major competitors switching affiliate agreements with with Nine and Ten, which weakened them.

Prime said its advertising revenues were up by 16% for the three aggregated regional markets of NSW and Victoria during the first quarter of 2016-17, as the company secured a 49.5% market share (when the Rio games were broadcast).

Seeing Prime posted a $16.2 million net profit for the six months ended December 2015, (which was a 17.1% plunge compared to the previous corresponding period), this half’s net profit of up to $16.3 million, means that without the surge in revenue from the Rio games, Prime could have reported another sharp fall in profit.

The games helped Prime also offset a 4% drop in the regional ad market in the September quarter.

Prime CEO Ian Audsley pointed tis out, cautioning that the first half result had been boosted by one-off events.

“While the first quarter is encouraging, the combined one-off effect of both the Olympics broadcast in August and our competitors changing affiliations from July 1 has benefited Prime in this quarter,” he said.

“Prime’s forward bookings for October through to December are also tracking above prior year levels, however we do not expect the trend to continue for the full year.

“History tells us that national advertisers bring forward their advertising campaign budgets in an Olympic calendar year and as a result we expect a softer second half result.”

Prime did not provide specific guidance at its full-year result in August when it revealed a total loss of $93 million thanks to around $123 million of write downs in the value of its TV licences and goodwill.

It didn’t provide full year guidance either yesterday, but warned that the first half experience would not be repeated in the six months to June 30 2017.

Prime’s shares eased 1.7% to 27.5 cents after an early rise.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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