TVNZ's half year net profit boosted by government funding

State broadcaster Television New Zealand today announced a 58 per cent increase in its December half year net profit to $22.9 million - a result boosted by "direct charter" funding of $5.3 million during the period

The Government has allocated $12 million to GST this financial year to compensate TVNZ for complying with a charter imposed by the Government.

TVNZ said it would pay the Government an interim dividend of $3.1 million.

The television and media business contributed a net profit after taxation of $18.5 million, an increase of $10.3 million year on year, while the net profit after taxation for the transmission business was $4.4 million, a decrease of $1.8 million year on year.

TVNZ chairman Craig Boyce said the increased surplus for the period was "a creditable performance".

"While total operating revenues declined marginally during the period under review, this was more than compensated for by the reduction in operating costs and non-recurring costs which were associated with restructuring the television and transmission businesses in the previous year," said Mr Boyce.

Advertising revenue rose 4.3 per cent to $164.2 million.

The increase in advertising revenue and charter funding revenue was offset by an $11.2 million fall in other external revenues -- mainly a substantial reduction in revenue by the satellite services division.

Satellite services was hit by a glut of bandwith and competition from Telecom's Southern Cross cable and diminished demand for big international sports events such as the Olympic Games.

The reduction in profitability of the transmission business was largely due to the investment lag in securing new business in the telecommunications sector, TVNZ said.

During the period, Broadcasting Communications Ltd successfully concluded an agreement with Telecom New Zealand for the provision of broadband services in provincial New Zealand with revenues from these services due to commence in the next financial year.


Mr Boyce said TVNZ Australia continues to perform strongly with several new analogue and digital transmission projects successfully undertaken.

- NZPA