Nine Entertainment has reacted to the impact of COVID-19 and the lockdowns and lower revenue and earnings with $702 million of impairments and a lower dividend.
On a statutory basis, the broadcast and publishing company reported a $575 million loss for the 2020 financial year while revenue fell 7% cent to $2.1 billion. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) were down 6% to $396.7 million.
Revenue fell 7% to $2.1 billion for the year.
The dividend was cut to 2 cents a share for the final, making a total for the year of 7 cents a share, down 305 from the 10 cents paid in 2018-19.
The only success in the Nine accounts was Stan, the streaming video arm of Nine which reported revenue of more than $241 million (up 54%) and EBITDA of $31 million compared to a loss of $21 million in 2019. All other businesses saw revenue and earnings fall.
Impairments and write-downs totalled $702 million (pre-tax), the largest component being a total $591 million non-cash impairment of intangibles which included a goodwill write-down of $300 million relating to the Nine’s Metro Free to Air television network across Sydney, Melbourne, Brisbane, Adelaide, and Perth.
The asset impairment also included the write-off of $28 million relating to payments made under the original NRL contract for rounds subsequently cancelled, as well as the prepayment relating to the postponed 2020 Cricket World Cup. It also included $195 million in impairments and write-downs of the value of Domain, the real estate listings company 59% owned by Nine.
Nine though remains confident with CEO Hugh Marks saying in the earnings release:“Whilst advertising market conditions remain challenging through the start of FY21, the market is performing ahead of earlier expectations, and appears poised to recover when the COVID conditions stabilise.
“At this stage, Nine’s September quarter FTA revenues are expected to be down ~15%, reflecting the continued weakness in advertising markets.” (Seven West Media on Tuesday put the fall at 15.8%)
“FTA costs are currently expected to decrease by ~5% over the year, notwithstanding the cycling of any one-off cost reductions, specifically the NRL,” Marks said.
Nine shares fell 2% to $1.72.