ARN revenue down despite strong digital growth
ARN Media has published its full year 2023 results, reporting a decrease in underlying earnings (EBITA) of $20.2 million on the previous year, to $71.6 million, as the group continues with its proposed takeover of Southern Cross Austereo (SCA).
Overall revenue for the year was $334.3 million, compared to $344.9 million in 2022, while net profit before tax was $45.2 million, compared to $66.0 million in the period before.
The group reported that its ARN radio network came in first in Australia on an annualised basis, recording its best ratings and highest ever cumulative audience, reaching 6.2 million people a week.
A drop in advertising revenues was attributed to the current macro-economic climate, with ARN segment revenues down 2% to $307.0 million, metro advertising down 5% and regional advertising falling 2%.
Growth in ARN’s digital audio advertising revenue, which rose 36% to $19.8 million, contributed to reducing overall revenue shortfalls compared to the previous period.
Digital continues to be a priority for the group, with podcast listening up 26.8% on a weekly basis, and 7% on a monthly basis. ARN’s iHeart finished the year as the leading podcast publisher with a average of almost 7 million combined listeners and 28 million monthly downloads, representing 27% YoY audience growth.
Tight cost control during 2023 restricted the group’s costs before significant items to $270.3 million, up 2% year on year (YoY).
“ARN continued its dominance of the radio market in Australia finishing the year as the #1 metropolitan radio network in Australia on an annualised basis again and our best ever ratings results, with regional markets also delivering impressive ratings results,” ARN Media CEO & Managing Director, Ciaran Davis, said.
Ciaran Davis
“While the macro-economic environment is impacting local advertising spend our metro, regional and digital assets are performing well in key audience metrics which demonstrates the quality of our talent and our content.
He continued: “We are excited about the outlook for digital audio given significant increases in the number of Australians consuming podcasts and live streaming radio across 2023. With a backdrop of challenging macro-economic conditions, we were able to uncover incremental revenue opportunities from new and existing clients and digital revenues grew 36% to $19.8 million, and digital audio losses narrowed by 27% to $8.8 million. We are very confident in establishing the digital business on a breakeven run-rate in the fourth quarter of 2024.
“While we are dealing with uncertain economic conditions which are impacting advertising spend across the entire media industry, ARN Media is well positioned for 2024. Following our review of operations we are confident we can identify and deliver further efficiencies across the business.”
ARN Media’s intentions to takeover SCA has become evident in the months since the group first took a 14.8% stake in its competitor in June 2023. In October, the company formed a consortium with Anchorage Capital Partners to make a proposal to acquire SCA, based on the rationale of the potential value creation in bringing together both ARN and SCA’s radio and digital audio assets.
The June investment was funded by the $66.3 million ARN received from the sale of its 25% interest in Soprano earlier in the year, with the additional income from the sale used to pay down debt.
“We are strongly focused on delivering shareholder value and we are confident that the Indicative Proposal to acquire SCA represents a compelling proposition for both ARN Media and Southern Cross Media shareholders,” ARN Media Chairman, Hamish McLennan added.
“The proposed transaction represents a unique opportunity for ARN to create a focused metro radio network of 10 stations across Sydney, Melbourne, Brisbane, Adelaide and Perth, plus a larger, growing and profitable regional radio footprint of 88 stations delivering a compelling regional network for advertisers and communities. We are continuing to progress the Indicative Proposal with the SCA Board.”
Subscribe to the daily newsletter
Have your say