Kerry Stokes’ Seven West Media has suffered a near $1 billion half year loss after being forced to writedown the value of its TV and newspaper businesses.
The media group, which owns the Seven Network, Pacific Magazines and West Australian Newspapers, made a net loss of $993.6 million for the six months to December 31, compared to a $150 million profit a year ago.
The result was weighed down by more than $1.1 billion in writedowns, including a $961 million goodwill impairment charge on its television assets.
Revenues also fell to $933.9 million from $966.3 million.
“Today’s statutory result reflects the tough economic conditions impacting consumer confidence and advertising expenditure over the past six months, and we believe it is prudent that we adopt a more conservative approach to the valuation of our businesses,” chief executive Tim Worner said in a statement on Wednesday.
Mr Worner said Seven expects a slight decline in TV advertising during 2015, with current trends in the newspaper ad market expected to continue.
Magazine ads are expected to improve.
Mr Worner said Seven would continue to invest in content and maintain a rigorous approach to cost management.
“We will also accelerate our moves to drive greater inter-connections between our media businesses as we build our presence in new forms of digital content delivery,” he said.
During the half year to December 27, Seven cut group operating costs by 1.3 per cent to $716.1 million, with costs at its newspapers and magazines sliced by four and 7.6 per cent, respectively.
TV costs rose by half a per cent.
SEVEN’S EARNINGS SLIDE
* Net loss of $993.6m, from a $150.1m net profit
* Revenue of $933.9m, down 3.4pct from $966.3m
* Interim dividend steady at six cents a share
* Broadcast TV EBIT of $181.7m, down 4.6pct from $190.4m
* Broadcast TV revenue of $677.2m, down 1.0pct from $683.7m
* Newspaper EBIT of $28.4m, down 26.8pct from $38.8m
* Newspaper revenue of $125m, down 10.3pct from $139.4m
* Magazine EBIT of $12m, down 9.8pct from $13.3m
* Magazine revenue of $114.1m, down 7.8pct from $123.8m