Nine withdraws profit guidance for 2020 financial year as market becomes ‘increasingly difficult’ to predict
Another media company has withdrawn its profit guidance for FY20 with Nine announcing to the Australian Securities Exchange (ASX) today that the impact of coronavirus (COVID-19) has made the future volatile for the broadcaster.
Nine said the ad market was “increasingly difficult to reliably predict”.
Nine has withdrawn its FY20 guidance
“The rapid progression of COVID-19 is beginning to have an impact on Nine’s markets. The short-term impact remains limited to date, with Nine’s March quarter FTA (free to air) ad revenues continuing to track close to flat and overall results for the quarter broadly in line with Company expectations,” read the ASX statement.
“However, the forward ad market is becoming increasingly difficult to reliably predict. As a result of this Q4 uncertainty, Nine considers it prudent to withdraw its FY20 guidance.”
Nine had already flagged in its most recently reporting that revenues had been a disappointment over the past 12 months and that it would seek to find $100m of cost savings over the next three years. Those cost efficiencies are now going to be front of mind for the company as it faces the uncertainty brought about by coronavirus.
In its half-year financial results in February, Nine had said it expected group earnings before interest, tax, depreciation and amortisation (EBITDA) to be similar to the FY19 pro forma result of $423.8m. It also said it was anticipating a market turnaround for Nine Radio as the cost base reset and advertisers returned to its stations. It noted it needed to get its television costs down in the final two quarters of the financial year, and that Domain – which had started slow – could benefit from a property market uptick.
In the current environment, Nine said it can no longer rely on the “defined set of advertising market assumptions” which informed this outlook.
Outdoor media company Ooh Media dropped its profit guidance earlier this week, also citing uncertainty and volatility in the market as the reason.
