Nine Entertainment has increased profit in the first full-year result since the merger with Fairfax Media thanks to an earnings lift at its new-look digital publishing division and growth at streaming service Stan.
The media giant’s pro-forma net profit rose 9.0 per cent to $224.8 million from $205.9 million a year ago, even as revenue slipped 1.0 per cent to $2.34 billion amid a “tough advertising environment”.
Chief executive Hugh Marks said the result reflected a transformative year that meant Nine was no longer singularly dependent on television, publishing, digital or radio.
“While change is a constant in the media business, we can take real pride in how we have handled the past eight months post-merger and we are now moving into calmer waters,” Mr Marks said in a letter to staff on Thursday.
Shares in the company were up by 3.88 per cent to $1.875 by 1031 AEST on Thursday.
Nine’s statutory net profit from continuing operations increased by 3.0 per cent to $216.6 million, while statutory revenue rose 40 per cent to $1.85 billion.
Earnings on a continuing basis increased 10 per cent to $423.8 million.
Factoring in the company’s discontinued ACM regional publishing unit, events division and Stuff NZ, statutory profit increased by 12 per cent to $234 million.
ACM and a number of events were sold before the year’s end, while Stuff NZ remains held for sale.
Nine incurred $58 million in costs related to the Fairfax merger, including $36.6 million in redundancies.
This was more than offset by a $93 million increase in the carrying value of Stan, which it had announced previously.
Nine’s digital publishing division added former Fairfax metro mastheads The Sydney Morning Herald, The Age and The Australian Financial Review to a stable that features 9Now, Pedestrian, CarAdvice and nine.com.au.
Earnings across the unit were up by 56 per cent to $130 million.
Stan, meanwhile, cut its full-year earnings loss in half to $21.3 million as it reduced costs by 23 per cent and boosted revenue by 62 per cent to $157.1 million.
Mr Marks said he was hopeful for Stan’s future, even with the looming arrival of Disney Plus to a market that also includes Netflix, Amazon Prime and Hulu.
He pointed to the new partnership with Paramount Pictures for rights in Australia to television series and films.
Earnings from real estate advertiser Domain, of which Nine holds a 60 per cent stake, fell by 15 per cent to $98 million amid difficult property market conditions in Sydney and Melbourne.
The broadcasting division, which comprises the Nine TV Network and a 54.4 per cent stake in Macquarie Media, reported an 11.0 per cent earnings decline as revenue slipped 5.0 per cent to $1.2 billion.
Free-to-air television revenue is expected to decline by 4.0 per cent in the quarter before improving from September onwards.
Nine said its proposal to buy the remaining 45.6 per cent stake in Macquarie would “take our strategy just one step further”.
The company will maintain a final dividend of 5.0 cents, fully franked, for a full-year dividend of 10.0 cents.