Nine to slash costs on back of profit slide

NINE Entertainment has flagged cost cuts to its free-toair businesses after a sharp drop in half-year profit amid a weaker advertising market.

The publicly listed media company reported net profit after tax for the six months to December 31 slid 41 per cent to $101.86 million.

However, the group’s revenues for the half-year increased by 65.7 per cent to $1.18 billion.

Chief executive Hugh Marks announced yesterday Nine would target the removal of up to $100 million in annualised free-to-air costs over the next three years. These cuts would focus on international content including one-off sporting events such as the Ashes and Cricket World Cup.

He said these were “costs that will not inhibit our ability to continue to invest in the growth opportunities around premium revenue and digital video”. Shares in the company jumped as much as 10 per cent on the news. By 3.15pm AEDT, Nine shares were still up 6.5 per cent at $1.72.

Nine also pared back its previous forecast for “low singledigit growth” in full-year group earnings and said it expected flat earnings, at a similar level to the last financial year.

Mr Marks said strong growth in its digital businesses were helping Nine offset some of the cyclic headwinds faced by its traditional media assets. The chief executive said almost 40 per cent of Nine’s earnings were now sourced from growing digital platforms.

Nine’s video streaming service Stan increased its revenue by 79 per cent to $116.6 million, with subscribers exceeding 1.8 million. Video-on-demand 9Now’s revenue grew by 65 per cent to $27.3 million.