News

News Corp revenues rise with business ‘vigorously pursuing digitisation’, Foxtel revenue drops

News Corporation’s financial results for the quarter ending March saw the global company post revenues of US$2.34 billion, a 3% increase year-on-year.

Meanwhile, net income was US$96 million, compared to a net loss of US$1 billion the prior year, and Total Segment EBITDA rose from US$242 million to US$298 million.

The results saw chief executive Robert Thomson declare that “the financial year is on trajectory to be the most profitable since our reincarnation in 2013.

“This highlights the transformed character of the company, with improved revenue performance and a 23% increase in profitability in the third quarter.

“The results vindicate the strategy of simplifying the asset mix, vigorously pursuing digitisation, slimming the cost base, and investing in three growth areas — digital real estate services, Dow Jones and book publishing.”

News Corp Consolidated Statement Of Operation Q3 FY21 [click to enlarge]

News Corp reported that its third quarter revenues were driven by an 8% or US$2.34 billion positive impact from foreign currency fluctuations and continued growth in the Digital Real Estate Services, Book Publishing and Dow Jones segments.

Growth was partially offset by lower revenues in the News Media segment, as well as weakness in the print advertising market, and a 1% or US$28 million impact from the closure and transition to digital of several regional Australian newspapers.

Net income (loss) per share attributable to News Corp stockholders was US$0.13.

Foxtel update

Results were also released for Foxtel, which is 65% owned by News Corp and 35% owned by Telstra. It reported adjusted revenues down 4% for the March quarter.

Excluding the impact of reduced residential broadcast subscribers, and commercial subscriptions being down as a result of lower occupancy rates at hotels, revenues were up 13% to US$61 million and EBITDA was up 34% to US$23 million.

A subscriber update revealed that Foxtel’s total paid subscribers hit 3.541 million, up 21% year-on-year, inflated by the launch of Binge and growth in Kayo subscriptions.

After launching in May 2020, Binge has reached 516,000 paid subscribers. Meanwhile, Kayo subscribers grew to 851,000 paid subscribers from 408,000 the prior year. However, Foxtel Now subscribers fell to 228,000 from 317,000 year-on-year.

News Corp Segment Review Q3 FY21 [click to enlarge]

Revenues in the quarter for Digital Real Estate Services were up 34% or US$90 million, driven by strong performance at Move. Segment EBITDA in the quarter was up US$43 million.

But growth was partially offset by higher employee costs at Move and REA Group.

In Australia, REA Group revenue (excluding acquisitions) rose by 8% to $225.6 million, while Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) including share of profit/losses from associates grew by 13% year on year to hit $123.3 million.

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