Seven returns to profit but sees revenues drop across all assets

Seven West Media has recorded a profit a year after making $1.8bn in write-downs, showing a net profit after tax of $207.3m for the last financial year.

The company, which owns the Seven Network, West Australian Newspapers, Pacific Magazines and half of the Yahoo7 joint-venture, saw its revenues fall by $60m in the past 12 months to $1.713bn, from $1.774bn last year.

Tim Worner:

Tim Worner: Seven has “a solid framework”

That net profit after tax result was also down on the previous year by 0.9%, although that result was erased by the massive write-downs from the company. This year there were restructuring costs of $32.9m recorded.

In the financial results the company flagged the TV advertising market as “short” noting the impact of the Olympic Games, which is likely to put off many big TV advertisers in the coming weeks, predicting the TV ad market to be “flat to down” in the next 12 months.

It also warned underlying earnings for the company would be 15-20% down next year thanks mainly to “increased content costs from the Olympics and AFL”.

In a statement to the Australian Securities Exchange CEO Tim Worner said: “Our strong balance sheet, our focus on efficiently managing our businesses and driving new opportunities for growth, in particular in the creation of content, provides a solid framework for Seven West Media over the coming twelve months.”

TV made up the bulk of the earnings with revenues of $1.259bn for the year, down from $1.279bn the year before, and earnings before interest and tax (EBIT) of $291.7m.

The West Australian saw revenues decline by 12.4% to $228.5m from $260.9m last year, with EBIT of $39.2m. Costs were down 9.5% in the year, while the company flagged its pending acquisition of News Corp’s Perth paper The Sunday Times as a positive step for the newspaper division.

Pacific Magazines also saw a big drop in revenues falling from $220.1m last year to $201.2m for the current year, with an EBIT of just $9m. However, the company pointed to the fact the magazine division had taken back its digital assets from Yahoo7 in March, claiming it had grown audiences by 43% on digital platforms in that time.

seven west media revenues 2016

Digital joint-venture Yahoo7 also saw revenues decline from $99.6m last year to $91.7m this year, with a $400,000 decline in ad revenues and a 32% drop in ‘other’ revenues, with EBIT of $26.4m, which it splits equally with Yahoo.

In the statement the company noted it was still looking at its options for the joint-venture, with US telco Verizon set to take over the Yahoo assets globally later this year.


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