Seven West Media boss Tim Worner says he believes in the future of free to air television despite the broadcaster taking a near-$1 billion writedown on the value of its TV assets and a gloomy outlook for advertising revenue.
Seven West announced a $993.6 million net loss for the six months to December 31 on Wednesday, the result weighed down by writedowns totalling $1.15 billion and concentrated on revised values of TV programming deals.
The massive half-year loss follows a $150 million profit in the same period a year earlier.
"This adjustment reflects the revision of future growth rates given recent subdued advertising conditions in the overall market," Mr Worner said.
"This does not diminish our belief in the future of FTA television or our ability to maintain leadership, revenue share and cost control in the business."
Always the core business of Seven West, television increased its share of revenue for the company - accounting now for 72 per cent of group revenue versus 70 per cent a year earlier as the newspaper and magazine businesses face tough trading environments.
Seven West's television revenue was down one per cent on the previous half-year to $677.2 million - a symptom of a weak advertising market that Mr Worner expects to continue.
"In terms of our outlook for this financial year, our advertising market growth expectations for television are for a slight decline," he said.
The Seven Network performed well against competitors in the tough conditions, increasing revenue share in markets around the country and claiming 40.8 per cent of national revenue in 2014.
Mr Worner flagged an increased focus on sports programming, where Seven holds broadcast rights for the AFL, the Australian Open and Wimbledon and the 2018 Commonwealth Games.
He also pointed to Seven's stable of programs as a competitive strength.
Mr Worner said there was a 19 per cent increase in content sales for Seven programs compared to a year earlier, with Australian episodes of flagship My Kitchen Rules now sold in 100 countries around the world and sales of the MKR format to eight territories including Canada.
Underlying net profit for the group was $137.6 million - down 8.4 per cent, while group revenue was 3.4 per cent lower at $943 million.
Seven West's newspaper business, publisher of The West Australian, suffered a 10.3 per cent slide in revenue to $125 million for the half, while its Pacific Magazines business had a 7.8 per cent drop in revenue to $114.1 million.
One analyst, who asked not to be named, said the dividend on offer was attractive but tempered by risks around Seven West's earnings.
Seven West shares were at $2.24 in March, 2014. The shares ended Wednesday steady at $1.42.
SEVEN WEST SUFFERS UNDER TV WRITEDOWNS.
* Half year net loss of $993.6m, compared to interim profit of $150.1m in 2013.
* Revenue of $933.9m, down 3.4pct, from $966.3m
* Interim dividend of six cents, unchanged.
Share
