Nine shares rise as analysts eye Olympics costs
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Nine Entertainment rose 2.99% and hovered at $1.38 a share by 10:50am AEST.
Analysts at E&P and UBS were broadly neutral on the company’s results.
What they said: “Overall, slight miss on revs to us/cons but EBITDA in line with better than expected costs control, but capex came in higher vs expectations,” UBS media analyst Lucy Huang wrote in a note to investors Wednesday morning.
“NEC’s outlook for total TV revenue growth for both halves of FY25e is better vs our flat growth expectation for total TV revs, but this appears to be offset by higher than expected FY25e total costs (ex Olympics) marginally higher on FY24 (vs us at -3% yoy ex Olympics).”
E&P analyst Entcho Raykovski said earnings trends were positive heading into the September quarter.
“The 1Q25 trends look positive but are supported by the Olympics, with no disclosure around the Olympics costs and total TV costs guidance (for marginal FY25 growth) excluding the impact of the Olympics — we suspect there will be plenty of questions on the call around the Olympics impact,” Raykovski said.
“Below the EBITDA line, the company has guided to FY25 D&A of $165 million to $175 million (Cons $161 million) and Net interest of $55 million to $65 million (cons $49 million), which will likely drive NPAT downgrades to consensus estimates in FY25. Pending more colour around the Olympics costs, we’d expect a fairly neutral market reaction today.”
Nine posts 31% profit slide amid torrid ad market
The news: Nine Entertainment has posted a 31% profit slide for the 2024 fiscal year off the back of ongoing macroeconomic pressures and a protracted period of weakness in the television advertising market.
The numbers: The nation’s largest domestic media group posted statutory net profit, including specific items of $134.9 million, down 31% on the $194.5 million booked a year earlier. Group net profit after tax and minorities was $189.4 million, down 28% on the $262.1 million reported in the previous year and roughly in line with analyst expectations.
Nine booked group revenue of $2.6 billion for the 2024 financial year, down 3% on last year. EBITDA was $517 million, down 12% on the 2023 fiscal year.
Nine declared a final dividend of 4.5 cents per share bringing the total full-year dividend to 8.5 cents, fully franked, down on the 11 cents per share declared last year.
The context: Across the group, Nine’s total television business reported a 32% earnings decline to $208.3 million, on $1.13 billion in revenue, which was also down by 10%. Nine-owned streamer Stan reported 5% revenue growth to $447.7 million, with a 24% EBITDA increase to $46 million.
Nine’s publishing business, which houses newspapers and other digital assets, reported a total revenue decline of 3% to 558.6 million and an EBITDA decline of 7% to $152.6 million. Nine’s audio business, meanwhile, reported a total revenue decline of 3% to $103.3 million, with EBITDA down 33% to $8.4 million.
In a trading update, Nine said the Paris Olympics delivered a strong audience performance, and that metro free-to-air ad revenue is expected to grow some 10% through the September quarter. The company expects total TV revenue growth over both halves, with costs expected to be marginally higher on the 2024 fiscal year.
The company’s publishing business, meanwhile, guided to weaker revenue and EBITDA following Meta’s decision in March to abandon deals with news publishers.
What they said: “In a year of challenging economic and advertising market conditions, there are some clear positives in this result. We have seen growth in our Total Television audiences this year as we have continued to invest in our content, standing us in good stead as we approach agency negotiations for CY25,” Nine chief executive Mike Sneesby said in a statement.
“As we continue to focus on the diversification of our revenues, Subscription and Licensing at Nine’s wholly owned businesses, Stan and Publishing, together grew by around 5%, to more than 30% of Group revenue ex Domain.
"This is a positive performance, particularly against the backdrop of economic and competitive market conditions — of particular note, our Metro mastheads grew both overall subscription and digital revenues across the year.”
The source: ASX announcement
