Nine Entertainment has bounced back from last year's huge loss with a full-year profit of $324.8 million, but warned that the outlook for the free-to-air TV ad market remains challenging.
Revenue for the year to June 30 was down six per cent to $1.29 billion and underlying net profit declined 7.1 per cent to $120.3 million, but the bottom line was buoyed by the $640 million sale of the Nine Live ticketing and events business.
"The ratings and revenue performance of our core free-to-air business was disappointing in the first six months of calendar 2016, due to a combination of the challenging ad market and poor programming outcomes," chief executive Hugh Marks said.
"However, we are taking positive steps to regain momentum in our ratings and revenue, with a well-advanced content plan for 2017 incorporating 50 per cent more premium local television content."
Nine warned that the metropolitan free-to-air ad market was again expected to be "flat to down marginally" over 2016/17, with regional markets performing even more poorly.
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The broadcaster hopes its renegotiated affiliate agreement with Southern Cross can offset some of that regional underperformance.
Nine took a $46 million charge related to its contract to purchase US drama from Warner Bros, which has proved to be unprofitable, and will make another $86 million provision in the first half of 2016/17 after reaching an agreement to exit the deal.
Nine, which last year lost $592.1 million largely due to a huge writedown on the value of its free-to-air TV licence, used some of the proceeds of the Nine Live sale to cut its debt by $346.7 million to $177.6 million.
NINE'S FULL-YEAR PROFIT
* Net profit $324.8m v $592.1m loss
* Revenue down six pct to $1.29b
* Final dividend down 1.0 cent to 4.0 cents per share, fully franked
