Digital Growth And Strong Cost Management Delivers Profitable First Half Performance For TVNZ

TVNZ has reported underlying operational earnings (EBIT) of $11.8m for the six-month period ended 31 December 2024.

The company also announced a total Net Profit After Tax (NPAT) of $53.1m for the period, an increase of $69.8m compared to H1 FY24. This included a non-cash adjustment of $41.3m to remove costs already accounted for in the FY24 impairment.

The result reflects efforts by the business to stabilise its revenue in a challenging advertising market and reshape its operating cost base to meet the economic conditions. Total revenue of $152.7m declined marginally (-1.9%) versus H1 FY24. While the difficult trading environment seen in FY24 continued alongside market disruption from global platforms, modest declines in television advertising revenue were buoyed by a 15.9% year-on-year increase in digital revenue.

Underlying operational expenses of $143.5 million were $19.6 million lower than the same period last year, with TVNZ taking several steps to adjust its cost profile in response to the economic environment. Savings were achieved primarily through a reset of organisational structure, and a reduction in content, technology and marketing costs.

Jodi O’Donnell, TVNZ’s Chief Executive says, “This is an encouraging financial performance for the business. 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.”

2030 Digital+ Strategy

TVNZ is in the first year of its 5-year Digital+ strategy which is focused on ensuring long-term value for audiences and shareholder alike. The plan sets out three key objectives for transitioning to a digital first media business; to double TVNZ+’s 18-54 audience, triple digital advertising revenue and create a sustainable operational model. TVNZ has made positive progress in all areas of its strategy as demonstrated in today’s result and the accompanying audience data.

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 over a quarter of the business’ revenue. Efforts have been directed at making it easier for advertisers and agencies to trade with TVNZ and access to audiences across platforms, as well as launching additional first-party data products through the TVNZ+ Activate offering. Underpinning this activity is a significant programme of work to address TVNZ’s ‘tech debt’ and replace broadcast infrastructure with a more modern and flexible cloud-based core.

“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,” says O’Donnell.

FY25 Full Year Outlook

While declines in advertising revenues have softened, challenging trading conditions are expected to continue through the second half of the financial year. Cyclical advertising trends also see lower television advertising revenues in the latter half of the financial year.

TVNZ is forecasting underlying operational earnings (EBIT) between $5m and $-5m for the full year FY25, with a range provided 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.

TVNZ’s interim accounts will be available in early March.

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