Traditional media continues to suffer as advertisers look elsewhere to spend their dollars and the costs of running television networks and media outlets rise.
Seven Group Holdings Ltd has announced the possibility of further job cuts following the company's report of a A$45 million net profit for the year ending June 30.
The profit was significantly impacted by declining advertising sales and A$44 million in one-off charges, including restructuring costs and writedowns on TV program valuations.
Revenue fell by 5% to A$1.42 billion, reflecting a broader decline in ad bookings across the television industry.
Earnings without the one-time charges were down 46% to $78 million.
“FY24 is a tough result for [Seven West Media] in a challenging market,” CEO Jeff Howard said.
More cost-saving measures
Howard took over the chief role in April following the departure of James Warburton. The earnings decline will be a further catalyst for cost-saving measures including job cuts.
The network cut around 150 jobs in the June half, achieving an estimated $25 million in cost savings. The company is targeting up to $108 million of further cuts to improve results.
The media group's operating earnings, excluding significant charges, declined by 33% to $187 million.
Howard noted that the decrease in advertising revenue was partially mitigated by an increase in the network's share of the total television advertising market, which rose to 40.2%.
Advertising revenues for commercial television networks for the 12 months ending June 30 were reported on Tuesday, amounting to $3.28 billion, reflecting an 8% decline. Advertising income at Seven’s television segment dropped by 7%, accounting for 80% of the company’s total revenue.
Revenue at The West, Seven's Perth-based newspaper group, increased by 1% to A$172 million, yet the publisher's operating earnings dropped by 13% to A$27 million.
For the second consecutive year, no dividend was distributed to shareholders.
Howard stated that this year's earnings would benefit from new rights deals with Cricket Australia and the Australian Football League (AFL), which include provisions for broadcasting content on its digital platforms.
However, E&P Capital analyst Entcho Raykovski expressed scepticism about a significant rebound in Seven West Media's shares following the financial update.
He pointed out that advertising bookings for September and October had declined compared to last year. Additionally, the company's share of the television advertising market is expected to decrease due to Nine's coverage of the Paris Olympics.
Seven’s results follow a Four Corners report on Monday that highlighted historical and cultural issues at the network.