NZME says operating profit will be $2m to $4m below bottom of earlier forecast

Monday, 11 November 2024

Media company NZME has warned its operating profit for the year to the end of December will be between $2 million and $4m below the bottom end of its previous forecast.

The company told investors in August that advertising revenues in the three months to the end of September were on course to be 1% higher than in the same quarter the previous year.

But in a statement to the NZX today, it said advertising revenues fell 1% during that quarter, attributing that to “the delayed economic recovery”.

It said the current quarter had “started positively” and it expected advertising revenues would be 5% higher than in its fourth quarter last year.

But the shortfall in the September quarter and its “anticipated full year expense outlook” meant it now expected an operating profit of between $53m and $55m, rather than one falling in the range of $57m to $61m.

Advertising sales comprise just over 70% of NZME’s revenue, while subscription revenues contribute about 25%.

NZME’s shares were down 2.8% at $1.04 in lunchtime trading.

The company’s profit downgrade comes on the heels of TVNZ announcing a further restructure last week and the expected loss of about 50 jobs as it seeks to plug a $30m revenue shortfall.

Media Minister Paul Goldsmith said on Thursday there was “no question that it's a difficult time in the media space”.

The Government was still “working away” on the Fair Digital News Bargaining Bill which has been expected to provide some financial assistance to media businesses by requiring Google and Meta enter into licensing deals for news content shared on their platforms.

The Government is understood to be finalising amendments to the law change amid public warnings from Google about its possible response to the legislation.

“We are working our way through the process and we're not far off, Goldsmith told The Post.