TV advertising bonanza propels CanWest's NZ earnings to $23m

By SIMON HENDERY

An advertising boom has helped to boost broadcaster CanWest's half-year result for New Zealand.

The buoyant television ad market has pushed TV3 to a $12.7 million operating profit for the six months to February 28, compared with an operating loss of $500,000 for the same period a year ago.

Across all the company's New Zealand operations - TV3, TV4 and its radio networks, including More FM, Radio Pacific, The Edge, The Rock and Solid Gold - half-year earnings before interest, tax, depreciation and amortisation rose strongly from $9.1 million to $23 million.

TV4 remains the company's only unit still in the red. It recorded a loss for the period of $3.4 million, compared with a $3.2 million loss for the same period last year. Revenue fell from $2.9 million to $2.6 million.

This week CanWest said it would relaunch TV4 as a youth-oriented music channel in October.

CanWest New Zealand chief executive Brent Impey said TV3's pleasing result was a combination of increased viewership and high demand for advertising.

He said audience numbers in the channel's 18- to 49-year-old target market were up 12 per cent in the year to February. TV3 revenue for the six months was up from $44.7 million last year to $55.7 million.

Impey said the outlook for the television advertising market remained strong.

Rival TVNZ said last week that the strong demand for advertising slots when third-quarter bookings opened this month meant it had to take the "unprecedented" step of making available time usually held for late bookings.

Impey said that while demand had not reached that point at CanWest, "inventory is under pressure" at TV3.

"It's the best sort of problem to have."

CanWest's radio operations reported an 8 per cent rise in half-year ebitda to $13.7 million on an increase in revenue from $45.9 million to $47.1 million.

Impey said the company was looking for ways to strengthen its financial performance - especially by looking for synergies between the radio and television networks.

The relaunch of TV4 as a music channel would provide cross-promotional opportunities with the youth-focused radio stations in CanWest's stable.

Canadian parent company CanWest Global Communications, which also owns media businesses in Canada, Australia, Ireland and Britain, yesterday reported a drop in half-year net profit from C$86.4 million to C$78.3 million on revenue of C$1.34 billion. Last year's interim bottom-line result was boosted by the C$63 million sale of CKVU-TV in Vancouver.

CanWest Global said its immediate priorities included a continued focus on reducing debt and cutting costs at all its business units.

Last year the heavily indebted company called for expressions of interest from potential buyers of its New Zealand operations, but later said it had pulled back from actively marketing the businesses.

In a conference call with analysts yesterday, CanWest Global chief executive Leonard Asper said there were no plans to sell the foreign broadcast operations, including TV3 and TV4, and stakes in Australia's Network Ten, Ireland's TV3 and Northern Ireland's UTV.

"The international assets, Australia, New Zealand, Ireland are not for sale. There's no attempts being made to sell them."