In its results for the six months to June 30, the FTSE 100 firm reported a 50% decline in adjusted earnings (EBITDA) to £165mln, while revenues shrank 17% to £1.21bn.
The decline was pushed by what ITV said was a “significant decline in the demand for advertising” across most of its categories, with revenue from ads dropping 21% to £671mln in the first half.
ITV also said it had paused the majority of its productions in the period as a result of new restrictions on working practices as a result of the pandemic, resulting in a 17% drop in revenues from its Studios division to £630mln.
One silver lining were the company’s viewing figures, which rose 4% in the period and was boosted by “strong growth in streaming” as online viewing jumped 13%.
Looking ahead, ITV said its productions were now restarting and that it was seeing “some signs of improvement” in its advertising arm. However, given the level of uncertainty, the group said it was not possible to provide guidance for the remainder of the year.
"This has been one of the most challenging times in the history of ITV…While our two main sources of revenue - production and advertising - were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory with productions restarting and advertisers returning to take advantage of our highly effective mass reach and addressable advertising platform, in a brand safe environment”, said chief executive Carolyn McCall.
The CEO added that the company’s investment in its ITV Hub online service had helped to boost the streaming figures during the six months, adding that its BritBox subscription service, set up in partnership with the BBC, was “ahead of target on subscribers in the UK” with plans to roll out the service internationally.
"The future is still uncertain due to the pandemic but the action we have taken to manage and mitigate the impact of [coronavirus] puts us in a good position to continue to invest in our strategy of transforming ITV into a digitally led media and entertainment company", McCall said.
"Quite apart from substantial competition from rivals with money to burn such as Netflix, Disney+ and Amazon Prime, ITV’s reliance on traditional advertising revenue is something of a thorn in its side", said Richard Hunter, head of markets at Interactive Investor.
"Companies understandably pulled back from advertising goods that they could not sell and, in any event, given the fact that costs became a priority, the advertising budget is often the first to give way. Even with advertisers now slowly returning, much of the damage has already been done", he added.
Despite the slump, Hunter said the company's "potential for further growth within the Studios unit and increasingly focused moves to reshape the business in light of changing viewing habits are well recognised by investors", and that as a result the shares were viewed as "defiantly optimistic, with the market consensus still coming in at a buy".
Following a decline on Thursday morning, the shares had recovered into mid-afternoon and were up 3.3% at 62.9p.
--Updates share price--