TVNZ boosts profit after cost cutting

TVNZ Building, Auckland. Photo /Herald On Sunday

Television New Zealand (TVNZ) has increased its dividend to the Government in the middle of what it calls the media industry's greatest international downturn and says it is adapting to the digital era better than most.

The state-owned media company today reported a 28 percent rise in underlying earnings to $12.9 million in the year to June 30. It had an after-tax loss of $26m after two non-recurring accounting adjustments.

TVNZ cut costs by 8.6 percent in response to a 4.7 percent decline in advertising revenue.

"The company has come through the recession well and is cautiously optimistic about the year ahead," said chief executive Rick Ellis.

The company will pay the Government a $4.87m dividend, up from $1.47m last year.

"The hard work of management and staff to respond rapidly to the downturn in advertising revenue, to reduce costs and maintain advertising market share have produced this great result," Ellis said.

"Despite the challenging year, the company continued the implementation of a new sales go-to-market approach, committed to key strategic digital infrastructure capital investments and progressed transformational projects focused on delivering ongoing efficiency gains to the company's operations," Ellis said.

During the year the company launched its first digital pay TV channel, TVNZ Heartland, on the Sky TV platform, extended the TVNZ Ondemand service to the Sony PlayStation Three and launched a successful iPhone news application.

"While TVNZ has adapted to the new digital era better than most, the economic recovery remains patchy. The company needs to continue to be mindful of costs but also not be afraid to continue with its strategy of transformation and diversification," he said.

Last week pay television operator Sky Network Television Ltd said it was developing a new service for the internet it hoped to launch by the end of the year.

The pay television operator reported a 16.9 per cent rise in annual profit on a 7.2 per cent rise in revenue and 3 percent rise in subscriber numbers.

It is now in 47.9 per cent of New Zealand homes.

- NZPA