Media Insider: Herald publisher NZME downgrades earnings guidance from $57m-$61m to $53m-$55m but positive about fourth quarter

NZME's headquarters in central Auckland.

NZ Herald publisher NZME has today lowered its guidance on earnings for the 2024 financial year, dropping it to $53 million-$55 million, down from earlier forecasts of $57m-$61m.

NZME – which also owns Newstalk ZB, a suite of entertainment radio stations and property website OneRoof – said in a statement to the NZX that advertising growth in its third quarter (July-September) had dropped to -1% year on year, after growth in the first quarter of 4% and in the second quarter of 2%.

The company had previously indicated in August that earnings would be at the lower end of the $57m guidance range.

While the fourth quarter had started positively, the company nevertheless now expected lower earnings than earlier indicated.

“Given the delayed economic recovery, advertising revenue was weaker than expected in September, resulting in advertising revenue in the third quarter of FY24 being 1% lower than the third quarter last year,” the company said in its NZX statement.

”However, the fourth quarter has started positively, and advertising revenue for FY24 is currently expected to grow by around 5% year on year. NZME is pleased to see the improved performance in the fourth quarter.

“Given the slower-than-expected recovery of market conditions, the resulting advertising revenue performance in the third quarter and NZME’s anticipated full-year expense outlook, NZME is reducing its guidance for Ebitda to be between $53 million and $55 million for FY24. NZME will update shareholders further at its annual results announcement in February 2025.”

NZME chief executive Michael Boggs, in a response to a question about any further planned cost savings, said: “At our half-year results we advised that we’d already implemented several initiatives to remove $6 million of annualised cost. Like any business, we are always looking at ways we can operate more efficiently.”

NZME’s announcement comes on the back of a challenging year for New Zealand media. All major commercial media companies, including TVNZ, NZME, Stuff and MediaWorks have been cutting costs. And in the case of Warner Bros Discovery, it axed its news operation, Newshub, entirely.

NZME shares were trading at $1.07 on the NZX before today’s opening.

Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.