NZME downgrades earnings expectations

NZME chief executive Michael Boggs. Photo / Michael Craig

Publicly listed media company NZME has downgraded its earnings guidance on the back of weaker advertising revenue.

In August, the media group declared a post-tax profit of nearly $2 million for the first half-year, down from just under $8.5m in the first six months of 2022.

NZME owns the New Zealand Herald, BusinessDesk, Newstalk ZB, the OneRoof property website and a suite of entertainment radio stations, including ZM, The Hits and Hauraki, and regional newspaper titles.

Given advertising revenue for the first half-year was down 7 per cent on the previous year, NZME said in August it expected to achieve earnings before interest, tax, depreciation and amortisation (ebitda) at the bottom of its guidance range of $59-64m for 2023. In a statement to the New Zealand stock exchange on Tuesday, the media company downgraded its guidance, saying ebitda for the full year was now likely to be between $57m-59m.

According to the company, the second half-year had seen improvement in business confidence, but this was not being consistently reflected in advertising revenue results.

Quarter-three advertising revenue was down 2 per cent, NZME said, and although quarter four started with October advertising revenue growth up 1 per cent year-on-year, November – the largest revenue month of the year – and December were currently pacing slower.

It described the advertising revenue market as volatile and said a number of customer campaigns had been cancelled or deferred until 2024.

NZME chief executive Michael Boggs previously said he was confident about the second half, after seeing data from August and bookings for September.

Media companies in general have been disadvantaged by current economic conditions, with soaring inflation, rising interest rates and additional costs dampening advertising revenue.