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Isentia reports a 20% reduction in revenue for first half FY2021

Media monitoring company, Isentia has reported a 53.6% decline in earnings for the six months to December, compared to the previous corresponding period. The group’s media intelligence revenue was $41.8 million for the period, a decline of 19.8% compared to the previous period, and $10.4 million less compared to H1 FY20.

The company’s revenue for the period was impacted by a cyber incident in the December 2020 quarter, an estimated $4.4 million on earnings before interest and taxes, and $3.3 million in revenue, according to the financial report.

The loss was through a combination of lost revenues and “additional costs”, stated the report. The cyber attack also delayed the roll-out of a number of initiatives scheduled for the March quarter 2021 to the June quarter 2021. As a result, the impact on the year ended 30 June 2021 financial results is expected to be approximately $7-$8 million in line with the estimates provided to the market when the incident occurred.

The company also cited “ongoing marketplace and operational pressures” caused by COVID-19 and the competitive nature of the Australian and New Zealand marketplace.

Harrison, CEO of Isentia

The lower revenues for the period were partly offset by ongoing “transformation and efficiency” programs which delivered an 8.9% reduction in total costs resulting in an operation profit of $5.9 million.

Isentia managing director and CEO Ed Harrison, who earns more than $1 million a year, said: “This has been a difficult half for Isentia with a significant impact on earnings from the cyber incident and COVID-19. Although we diverted resources to strengthen our cyber security posture, we continued with our strategic transformation program and delivered new product features to our customers. Other projects were delayed by 4-6 months and are now expected to be delivered in Q4 FY21 and Q1 FY22.

He added that the ongoing action in the Copyright Tribunal continues, as the company seeks “a fair value exchange with publishers” and a “level playing field” with competitors.

Isentia and competitor Meltwater currently have a dispute before the Copyright Tribunal in relation to the fees paid for the use of editorial via the Copyright Agency, which then distributes money to most publishers. Last year, both News Corp’s The Australian and Nine’s The Australian Financial Review entered into direct licensing deals with the media monitors instead of the agency.

Streem was also originally part of the proceedings but withdrew at the end of last year and entered into a new licensing agreement with the Copyright Agency.

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