TVNZ has reported underlying operational earnings of NZD$11.8 million for the six-month period ended 31 December 2024. The company also announced a total Net Profit After Tax (NPAT) of $53.1 million for the period, an increase of $69.9 million compared to H1 FY24. This included a non-cash adjustment of $41.3 million to remove costs already accounted for in the FY24 impairment.
According to CEO Jodi O’Donnell, the result reflects efforts by the business to stabilise its revenue in a challenging advertising market and reshape its operating cost base to meet economic conditions.
Total revenue of $152.7 million declined marginally (-1.9%) versus H1 FY24. While the difficult trading environment seen in FY24 continued, alongside market disruption from global streaming services, modest declines in television advertising revenue were buoyed by a 15.4% year-on-year increase in digital revenue.
Underlying operational expenses of $143.9 million were $18.8 million lower than the same period last year, with TVNZ taking several steps to adjust its cost profile in response to the economic environment. Savings were achieved primarily through a reset of organisational structure and a reduction in content, technology, and marketing costs.
Jodi O’Donnell, TVNZ’s Chief Executive, says, “This is an encouraging financial performance for the business. While the advertising market remains challenged, we’ve worked hard to shore up our revenue pipeline and reduce our costs. Today’s result puts us in the best possible position to advance our digital strategy and deliver on our aspiration to be New Zealand’s number one streaming platform of trusted news, sport, and entertainment.”
2030 Digital+ Strategy
TVNZ is in the first year of its five-year Digital+ strategy. The plan sets out three key objectives for transitioning to a digital-first media business: to double TVNZ+’s 18-54 audience, triple digital advertising revenue, and create a sustainable operational model.
TVNZ says it has made positive progress, as demonstrated in the Interim Repot and accompanying audience data. TVNZ+ has cemented its position as the biggest local streaming platform, with over 1.65 million New Zealanders now using the service every week. In the first half of FY25, TVNZ’s online audience benefited from enhanced personalisation features, the launch of a digital news video home, News on TVNZ+, and premium titles including The Day of the Jackal, Love Island, and the UEFA 2024 Euros.
Digital now makes up over a quarter of the business’ revenue. Efforts have been directed at making it easier for advertisers and agencies to trade with TVNZ and access audiences across platforms, as well as launching additional first-party data products through the TVNZ+ Activate offering.
Underpinning this activity is a significant programme of work to address TVNZ’s ‘tech debt’ and replace broadcast infrastructure with a more modern and flexible cloud-based core.
“Audiences are changing, and we have a plan in place to meet their needs today and into the future. We’re focused on leveraging our strength in television while investing to become a digital-first business. We’re committed to expanding our offering with new products and services that deliver for viewers and advertisers,” says O’Donnell.
FY25 Full Year Outlook
While declines in advertising revenues have softened, challenging trading conditions are expected to continue through the second half of the financial year. Cyclical advertising trends also see lower television advertising revenues in the latter half of the financial year.
TVNZ is forecasting underlying operational earnings (EBIT) between $5 million and -$5 million for the full year FY25, with a range provided due to ongoing market volatility and some unpredictability around the phasing of investment in technology.
In addition to this underlying result, TVNZ’s full-year result may include a non-cash impairment, acknowledging the impact TVNZ’s current forecasted future earnings will have on its asset valuation.
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