CanWest earnings jump by 85pc

By SIMON HENDERY media writer

Broadcaster CanWest New Zealand has turned in its best annual operating profit as its radio and television businesses cash-in on strong demand for broadcast advertising.

The broadcaster, which runs the 3 network, new music channel C4, and about half the country's radio stations, yesterday reported group earnings before interest, tax, depreciation and amortisation (ebitda) of $39 million for the year to the end of August, up 85 per cent from $21 million a year ago.

A turnaround from last year's $4.9 million ebitda loss for its television operations to a $14 million profit was a major highlight for the group this year.

Earnings for 3 leapt from $1.4 million to $21 million as the buoyant advertising market pushed revenue up from $94 million to $116 million.

Predecessor of C4, TV4, took some of the shine off the television result, contributing a $7 million ebitda loss from revenue of $5 million.

The radio side of the business - which includes The Edge, The Rock, MoreFM, The Breeze, Solid Gold, and the Radio Pacific networks - also had a strong year, with revenue up 5 per cent to $92 million and ebitda up 8 per cent to $26 million.

CanWest NZ chief executive Brent Impey said the results reflected increasingly strong audience and advertising market shares in the company's television operations, and consistent growth across its radio business.

"The demand for commercial airtime, particularly on radio, is at the highest we have ever seen, and there are no obvious signs of that demand declining."

He said the strong economy over the past year had led to a resurgence of brand advertising which had flowed through to an increase in both TV and radio advertising revenue.

Impey said there remained room for significant improvement in the business's overall performance and he expected next year's operating profit to be even stronger.

Delivering on that promise will be made easier by the demise of the haemorrhaging TV4. Without the high programming costs of its predecessor, Impey said the company hoped C4 would break even in its first year, or at worst report a $1 million ebitda loss, moving into profit within 24 months.

C4 was launched last month and while initial viewer numbers had been "many times higher than what we anticipated," Impey said initial reaction from advertisers had been "variable" because CanWest was dealing with the legacy of previous music channels which had failed.

"We're trying to show through some solid ratings that we can get there," he said.

On the radio side of the business, Impey said CanWest was benefiting from the launch into Auckland this year of youth network The Edge, which had been kept out of the market by the lack of a frequency.

Impey said two Auckland radio frequencies were being auctioned this month and if CanWest secured one it would bring its easy-listening station The Breeze into the city.

Canadian parent company CanWest Global Communications singled out "substantial" ebitda gains from its New Zealand operations and its share in Australia's Network Ten when it reported its result yesterday.

The Winnipeg-based global group reported a full-year net profit of C$46 million ($56.3 million).