Finance Finance News Nine loses $592m but Stan is the silver lining
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Nine loses $592m but Stan is the silver lining

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Nine Entertainment has reported a full year loss of $592.1 million largely due to massive writedowns, and has forecast a fall in its share of market revenue.

A $792 million non-cash impairment charge dragged Nine into the red for the year to June 30, with a $101 million tax credit associated with the sale of Nine Live partially offsetting the writedown.

Underlying profit dropped 2.9 per cent to $140.1 million on a continuing fall in TV advertising.

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Underlying earnings also dropped 7.6 per cent to $287.3 million, in line with June’s downgraded guidance of between $285 million and $290 million.

Chief executive officer David Gyngell said Nine’s ratings had improved during the first two months of 2015/16, but that its share of the free-to-air advertising market was still likely to decline.

“In what has been a difficult free-to-air advertising market, our June quarter share performance was short of our expectations,” Mr Gyngell said.

“Nine’s ratings performance has improved markedly since the beginning of July, which is expected to underpin revenue share over the half.

“However, it is likely that full year share will be marginally down on that of FY15, given the intensely competitive market, coupled with the timing of certain major events.”

However, Nine’s Stan streaming service is growing much faster than expected, but no one knows if it will ever turn a profit.

The Nine and Fairfax Media joint venture has secured more than 300,000 subscribers since launching in January, though fewer than 200,000 are currently paying the $10 a month fee.

That’s faster growth than expected, but all players in the streaming market, including Netflix, are booming, Nine boss David Gyngell says.

“Stan is running ahead of what we thought it was going to be, but then the category is,” he said.

“So are we getting our share? I think we are probably keeping in touch, just. We are up against the hottest brand in the world right now in Netflix.”

Netflix doesn’t reveal its Australian customer numbers, but Roy Morgan Research estimates that in July, 737,000 households had used the US service since it entered the local market in March, though many early customers were on free trials.

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