TVNZ profit plunges 89 per cent to $1.4 million

TVNZ chief executive Kevin Kenrick said its been a year of big challenges for TVNZ. Photo / Greg Bowker

TVNZ's net profit has fallen almost 89 per cent over the past year.

The state broadcaster's net profit fell to just $1.4 million in the year to June from $12.7m in 2016.

TVNZ reported earnings before interest, tax, depreciation, amortisation, and fair value adjustments of $17.4m down $19.5 million on the previous year, which it said was mostly due to an "onerous contract provision and marginal year on year declines in advertising revenue".

Its revenue declined 2.5 per cent to $316.5m. While 2017 started with a faster fall in TV advertising, TVNZ said it ended with year-on-year growth in TV revenue.

Overall advertising revenue, however, was down from $303.9m to $299.2m.

The broadcaster said that its content agreement with Disney had become loss-making and it has booked a $12.4 million provision in FY2017 to recognise the forecast future losses of this contract.

Excluding the "onerous contract", TVNZ said its operating expenses decreased $1m to $286.7m.

TVNZ chief executive Kevin Kenrick said the year had been one of "big challenges, big projects and a few tough decisions".

"TVNZ exceeded its goal of engaging 2 million New Zealanders per day with peak audience TV share reaching a multi-year high and TVNZ OnDemand delivering double-digit growth in audience reach.

"Other highlights include TVNZ.co.nz upgrades to bring together live streamed TV channels and OnDemand viewing, a refresh of TVNZ branding, and the 25 year anniversary of New Zealand's most watched local entertainment series, Shortland Street," Kenrick said.

"The other big focus for the year has been the significant steps taken to create a more sustainable future including redesigning the organisation structure, renegotiating core content agreements, and writing off unsustainable content and accommodation lease commitments," he said.

"These actions will enable the business to confidently increase future year investments to accelerate digital growth."