Macquarie Radio expects a 65 per cent fall in half year profit, partly due to the cost of a new multi-million dollar contract for broadcaster Alan Jones.
The owner of Sydney radio stations 2GB and 2CH said costs from its proposed merger with Fairfax Media's radio business, which is set to be completed by the end of March, had also significantly dented profit in the six months to December 31, according to preliminary calculations.
The company made a profit of $3.8 million in the first half of the 2013/14 financial year, meaning its latest guidance indicates a profit of just $1.3 million in the first half of 2014/15.
Revenue rose 3.7 per cent in the six months to December, but higher operating costs associated with talent contract renewals, a restructure of Macquarie Radio's sales force and increased administration costs had outweighed that growth, chairman Russell Tate said.
Alan Jones, who reportedly is paid an annual salary of more than $4 million extended his contract in December, taking his term up to June 2017.
Macquarie Radio shares dropped eight cents, or seven per cent, to $1.07.
The finalised financial results for Macquarie Radio, which is owned by John Singleton, will be released on February 18.
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