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TVNZ lifts underlying earnings

Friday 27th August 2010

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State-owned Television New Zealand posted a 28% increase in underlying earnings and announced a bigger dividend payment to the government after reining in costs to make up for a drop in revenue.

Underlying earnings, which excludes two non-recurring accounting adjustments, rose to $12.9 million in the year ended June 30, from $2.8 million a year earlier, the broadcaster said in a statement.

TVNZ’s profit tumbled 89% in the previous year in the face of an advertising downturn that forced it eliminate jobs, cut services and wind back plans to attend the Commonwealth games in India this year. In the latest year, the company cut operating costs by 8.6% to $342 million, while advertising revenue dipped 4.7% to $284 million.

“The hard work of management and staff to respond rapidly to the downturn in advertising revenue, to reduce costs and maintain advertising market share have produced this great result,” said chief executive Rick Ellis.

TVNZ’s net loss for the latest year was $26 million, which included a one-time charge of $26.8 million to account for a change in the way it expenses programme stock, and a $14.2 million charge for changes to tax rules of depreciation.

Ellis said continued structural changes in the industry and uncertainty over the economy “would still challenge all media companies in FY2011”.

“While TVNZ has adapted to the new digital era better than most, the economic recovery remains patchy,” he said.

“The company needs to continue to be mindful of costs but also not be afraid to continue with its strategy of transformation and diversification.

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