News Corp reports bumper profits for FY2021

News Corp has reported its “most profitable” financial year, in its current form, with revenues rising 4% in the full year and up 30% in the fourth quarter. Revenues were US$9.36 billion, compared to US$9.01 billion in the prior year.

Profitability improved by 26% for the year, due to a record number of digital subscriptions. Net income was US$389 million compared to a net loss of US$1.55 billion in the prior year, which included non-cash impairment charges of US$1.69 billion.

During the financial year, News Corp signed multi-million dollar multi-years deals with digital platforms Facebook and Google, which have added to the business’ bottom line.

“The intrinsic value of our content has been amplified through landmark news payment agreements with major tech platforms,” said News Corp chief executive, Robert Thomson. “These deals, which are confidential, will add revenue annually into nine figures and are a profoundly positive sign of the ongoing transformation of the news landscape.”

Source: News Corp fourth quarter and full year results for fiscal 2021 [click to enlarge]

set to acquire OPIS

The company’s streaming service Foxtel, also exceeded two million total paid subscribers as of year end, representing 40% total paid subscriber growth.

The News Media division, which includes News Corp Australia titles reported full year revenues declining US$596 million, or 21%, compared to the prior year.

Revenues at News Corp Australia declined 1% while revenues at News UK increased 5%. Adjusted Revenues for the segment declined 4% compared to the prior year.

Circulation and subscription revenues increased US$104 million, or 11%, compared to the prior year, reflecting a US$79 million, or 8%, positive impact from foreign currency fluctuations, digital subscriber growth and price increases, partially offset by lower single-copy sales revenue.

For the fourth quarter, digital revenues at the newspaper mastheads represented 30% of combined revenues.

Digital subscribers at News Corp Australia’s mastheads as of June 30, 2021 were 810,000, compared to 647,600 in the prior year (Source: Internal data). For UK publications The Times and Sunday digital subscribers as of June 30, 2021 were 367,000, compared to 336,000 in the prior year (Source: Internal data). The Sun’s digital offering reached approximately 124 million global monthly unique users in June 2021, compared to 133 million in the prior year (Source: Google Analytics). New York Post’s digital network reached approximately 123 million average monthly unique users in June 2021, compared to 150 million in the prior year (Source: Google Analytics).

Advertising revenues declined US$677 million, or 43%, compared to the prior year, reflecting $649 million, or 42%, of lower advertising revenues, this was mainly related to News America Marketing, and the closure or transition to digital of certain regional and community newspapers in Australia and continued weakness in the print advertising market, exacerbated by COVID-19.

The decline was partially offset by a $68 million, or 5%, positive impact from foreign currency fluctuations and growth in digital advertising, particularly at the New York Post. Other revenues decreased US$23 million, or 8%, compared to the prior year, primarily due to the sale of Unruly in January 2020.

Book publishing and real estate division also continued to deliver strong results for the business.

Overall growth was partially offset by higher costs in the other segments due to higher employee costs, primarily related to stock price and company performance, non-recurring legal settlement costs and investment spending related to global cost reduction initiatives, as well as the divestitures of News America Marketing and Unruly.

The company reported fourth quarter total revenues of US$2.49 billion, a 30% increase compared to US$1.92 billion in the prior year period, reflecting a US$212 million, or 11%, positive impact from foreign currency fluctuations.

Thomson stated: “Our strong record of cash generation, with a positive balance of $2.2 billion at the end of June, has given us enhanced flexibility. We were opportunistically able to take advantage of the required sale of OPIS, which we believe will be transformative for the already successful Dow Jones Professional Information Business.

“Our robust cash position has prompted the company to actively review our capital allocation policy, with a greater focus on buybacks.”


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