News is good for Canwest as ads dip

TV3 newsreaders Hilary Barry, Mike McRoberts and current affairs host John Campbell are all doing their bit to insulate their employer, CanWest MediaWorks, against the softening advertising market.

Disclosing a fall in February half-year net profits from $16.6 million to $13.35 million, CanWest chief executive Brent Impey said the news programmes' popularity underpinned its earnings.

"While we have observed a modest softening in advertising market conditions, we are not seeing evidence of a significant economic decline. In our case, the softening is more than offset by market share growth in television."

The fall largely reflected a decision - foreshadowed last year - to schedule more expensive local content in the first half of the year.

These costs should dissipate in the second half and trading profits should be ahead of last year's $67.8 million.

However, Canwest's shares still fell 4c to $1.68 amid disappointment over the performance of its RadioWorks division - operator of The Rock, The Edge and More FM brands.

Sales rose from $124.6 million to $129.52 million. It will pay an interim dividend of 4.5c, up from 4c last year.

CanWest's earnings fall follows a drop in half-year net profits at chief rival TVNZ from $30.68 million to $23.3 million. This reflected the closure of the state broadcaster's satellite services business, a fall in advertising revenue and government funding.

CanWest's RadioWorks division grew its sales from $56 million to $56.9 million, while its trading profits fell from $19 million to $17.9 million.

It had weathered the costs of the launch of its new Radio Live business and managed what Impey described as good market share south of the Bombay Hills. The Auckland market "remained a challenge".

RadioWorks bought Orewa-based Times FM and Queenstown-based Q92FM during the first half - both high growth areas.

Sales at TV Works rose from $68.6 million to $72.6 million. Trading profits fell from $20.2 million to $17.8 million. In February and March, 3 News snared a 37 per cent larger share of the 18-49-year-old metropolitan markets than TVNZ.

The softening advertising market was evident at the TV division because firms were choosing cheaper radio and newspapers.

Solid growth was expected to continue for the "foreseeable future".

"We believe it is important not to fall into the trap of talking the economy down unnecessarily - while at the same time being transparent about current economic reality," Impey said.