Chief executive Jodi O'Donnell outlines operational turnaround and what lies ahead. Video / Michael Craig
TVNZ has posted a first-half operating profit of $11.8 million - a positive sign that the state broadcaster is on track with its digital transformation after a challenging year which has seen the loss of dozens of staff and top-rating shows such as Sunday and Fair Go.
However, the companyis warning it might still fall into an operational loss for the full year, partly because of continuing challenging economic conditions and the requirement to invest in new technology.
TVNZ today announced a net profit after tax of $53.1m for the six months to December 31 - this included a non-cash adjustment of $41.3m to remove costs already accounted for in its 2024 financial year impairment.
While revenue was down slightly for the six months - by 1.9% to $152.7m - the company said it had slashed operating costs by almost $20m compared with the same period the previous year.
TVNZ chief executive Jodi O’Donnell said the financial results were “encouraging”.
They reflected efforts by the business to stabilise its revenue in a challenging advertising market and to reshape its operating cost base.
“While the advertising market remains challenged, we’ve worked hard to shore up our revenue pipeline and reduce our costs. Today’s result puts us in the best possible position to advance our digital strategy and deliver on our aspiration to be New Zealand’s number one streaming platform of trusted news, sport and entertainment.”
O’Donnell told Media Insider the company was on track to reach its annualised savings target of $30m for the full financial year. TVNZ’s financial year runs from July 1 to June 30.
About $15m of this would be through increased revenue, and $15m through cost reductions, she said.
The cost reductions include Shortland Street production savings - the flagship show has been reduced to three nights a week and is now partly funded by NZ on Air as well as benefiting from the Government’s screen production rebate. Sources believe TVNZ will save more than $10m a year from the changes.
TVNZ chief executive Jodi O'Donnell. Photo / Michael Craig
TVNZ had 601 staff at the start of its financial year last July. That number is now believed to be down to about 550. The broadcaster had about 730 staff two years ago.
O’Donnell said there were no further restructuring plans at this stage.
“That’s really important for our people to know. There are no current plans around that. Obviously, the market is still really volatile so we need to make sure that all of those revenue forecasts show up. We’ll be keeping a really close eye on our revenue forecasts along with managing our costs.”
Financial outlook
In a full-year outlook, TVNZ said it was forecasting operational earnings anywhere between a $5m profit and a $5m loss.
“While declines in advertising revenues have softened, challenging trading conditions are expected to continue through the second half of the financial year,” it said.
“Cyclical advertising trends also see lower television advertising revenues in the latter half of the financial year.”
The company was providing a range on its full-year operational earnings “due to ongoing market volatility and some unpredictability around the phasing of investment in technology”.
“In addition to this underlying result, TVNZ’s full-year result may include a non-cash impairment, acknowledging the impact TVNZ’s current forecasted future earnings will have on its asset valuation. While the market remains challenging, the initiatives delivered have supported TVNZ in reaching a stronger position, enabling the business to execute its strategy and secure its digital future.”
For the six months to December 31, TVNZ said modest declines in television advertising revenue had been buoyed by a 15.9% year-on-year increase in digital revenue.
Eddie Redmayne stars in The Day of the Jackal, which screens on TVNZ+.
Digital+ strategy
TVNZ is in the first year of its five-year Digital+ strategy which aims to double TVNZ+’s 18-54 audience, triple digital advertising revenue and create a sustainable operational model.
The company said it had made positive progress in all three areas.
“TVNZ+ has cemented its position as the biggest local streaming platform, with over 1.65 million New Zealanders now using the service every week.
“In the first half of FY25, TVNZ’s online audience benefited from enhanced personalisation features, the launch of a digital news video home; News on TVNZ+, and premium titles including The Day of the Jackal, Love Island and the UEFA 2024 Euros.”
Digital now makes up more than a quarter of TVNZ’s revenue.
“Audiences are changing, and we have a plan in place to meet their needs today and into the future. We’re focused on leveraging our strength in television, while investing to become a digital-first business. We’re committed to expanding our offering with new products and services that deliver for viewers and advertisers,” said O’Donnell.
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.
