Seven West Media’s full-year profit slashed in tough TV market
Seven West Media’s profit has been slashed by more than $60 million year-on-year in the 2023 financial year, as the group battles with a tough television ad market.
In its full-year earnings today, the media group posted $280 million in EBITDA (earnings before interest, taxes, depreciation and amortisation), an 18% decline compared to $342 million in 2022.
Early tradings on 16 August saw Seven West Media’s share price drop 7.5% to $0.37 after the earnings call.
[click to enlarge]: result highlights
In total TV advertising with a 7.9% market decline, Seven West Media achieved a 38.5% total TV revenue share.
Notably, digital earnings now account for close to 50% of the group’s underlying earnings. 7Digital’s EBITDA growth was 17% (excluding the Olympics and Commonwealth Games).
The group wasn’t shy in boasting its national audience reach. Managing director and CEO, James Warburton, said the group will continue to drive audience and revenue share with content, including the AFL and cricket (whose rights were secured by Seven this year alongside Foxtel), and NBCUniversal shows.
“The programming slate continued to deliver audience consistency and strength, and ensured Seven retained its position as the number one network for national audience share for the third year running,” Warburton said.
During the Q&A section of its investors call, Warburton stresses that Australian television is very much a two-horse race now.
When probed about what investors should make of Seven Network losing the Olympics rights to Nine, Warburton said, ultimately, factors including time zones and cost of production will lead to losses that Seven would rather avoid.
“There’s no doubt that Brisbane [Olympics] will be magnificent, but the games before will be difficult.”
Seven West Ventures, the early-stage investment arm of Seven West Media, has finalised its investment in Antony Catalano and Alex Waislitz’s View Media Group.
James Warburton.
The arm offers partnerships with consumer-oriented brands through TV advertising and premium digital reach, and now has a portfolio value of approximately $100 million.
Looking into the next financial year, the group said it will “continue to look for ways to drive efficiency into the business”.
“We continue to invest into our digital future and with our solid balance sheet and ongoing investment and cost discipline. We are well placed to capitalise on a market improvement, and well placed to compete for a larger share of the total video advertising pool,” Warburton said.
The group will continue its market share buy-back into 2024 financial year, but will hold dividend payments due to “prevailing market conditions”.
Seven West Media’s market cap is currently $621.42 million. The group’s free-to-air competitor, Nine Entertainment Co, is expected to report its financial results next Thursday.
