A WARNING of a double-digit profit drop has been made by Seven West Media for its current financial year based on softer market conditions and increased content costs associated with the Olympics and AFL rights.
Chief Executive Tim Worner, justified the cost of its sports rights, saying they would deliver enduring value.
The company announced this week an underlying net profit after tax (excluding significant items) of $207.3 million, down 0.9 per cent from the previous year.
Digital advertising revenue grew 55.6 per cent, but TV, magazine and newspaper advertising fell.
Mr Worner said: “We forecast the metro television advertising market to be flat to down low single digits, while we expect advertising trends in our publishing assets to continue.”
The West Australian’s revenue dropped from $260.9 million to $228.5 million and costs were trimmed 9.5 per cent.
Advertising revenue was $144.6 million (-16.5%), circulation revenue fell $55.9 million (-9%)
The West Australian’s readership is up 6.6 per cent, its digital editions have grown 270 per cent and its mobile audience has increased 38 per cent.
“The West continues to transform, leveraging its position as the number one news source in WA, both in print and online. And it’s using that power to establish new revenue streams. It is still the best performing metro publisher in Australia in terms of operating margin and circulation,” Mr Worner said.
“Nonetheless, softer economic conditions as well as structural challenges have continues to impact revenues this year, particularly in classifieds which have remained under pressure.”
He said his company could not “afford to stand still”.
“The momentum we have created in our transformation from the number one linear broadcaster to the leader in premium video content is now growing,” he said.
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