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News Corp lifts revenue by 29pc

News Corporation’s fourth quarter results show digital news revenues are up 30 per cent, driven by strong subscriptions, with total revenues for the period increasing 29 per cent.

The strong quarterly growth is further reflected in the 11 per cent, or $9 billion, boost in full-year revenues.

Thirty per cent of the news and information services segment’s $13 million quarterly increase was attributed to digital growth. Digital subscriptions continued to increase worldwide, with The Wall Street Journal improving by 25 per cent, The Times and Sunday Times up 27 per cent and News Corp Australia mastheads adding 14 per cent more subscribers. The Sun’s unique global digital readership of 85 million remained steady.

News Corporation chief executive, Robert Thomson, said: “Fiscal 2018 was a year of operational and transformational success at News Corp, with robust performance across our businesses, and positive and profound changes in the character of our revenue flows, which were more global, digital and subscription-based”.

The continued growth in the book publishing and digital real estate services segments contributed to group revenues. Additional quarterly gains from the consolidation of News Corp’s Australian subscription TV assets, Foxtel and Fox Sports, which merged in April and increased the company’s stake in the TV business to 65 per cent.

Mr Thomson said the conglomerate was “now a more substantial company after the Foxtel transaction”, and believes increased recurring, subscription-based revenues will offset the “volatile advertising environment”.

Fiscal 2018 revenues reflected similar trends in the business.

Full-year and quarterly revenue was offset by increased non-tax write downs associated with the Foxtel/Fox Sports merger, a write-down valued at $998 million, and a $237 million US taxation charge. Quarterly figures recorded an improved net loss of $355 million compared to the previous year and a full year loss of $1.4 billion.

Total Segment EBITDA for the quarter was $312 million, while full-year finished on $1.07 billion.

Fourth quarter revenues in the news and information services segment increased 1 per cent, with digital revenues accounting for 30 per cent of the $13 million figure.

Australian subscriptions up 14 per cent

Digital subscriptions to News Corp Australia mastheads increased 14 per cent to 415,600 compared to the fourth quarter of 2017. Despite the conglomerate’s Australian-arm experiencing growth in digital advertising revenues and the benefits of introducing cost reduction initiatives in the quarter, revenues fell 3 per cent.

News Corp Australia finished financial year 2018 up 1 per cent, in line with News UK and Dow Jones, which improved revenues by 4 per cent and 2 per cent respectively.

Globally, advertising revenues declined 2 per cent in quarter four, continuing the trend which has been driven by a “weakness in the print advertising market”. This led to the 3 per cent ($76 million) loss during the 2018 fiscal year.

Quarterly segment EBITDA declined $9 million in the quarter, or 9 per cent, compared to the prior year, attributed to higher operations costs at Dow Jones and lower revenues at News Corp Australia. Full year segment EBITDA finished down 5 per cent ($22 million).

Books and real estate the cash driver

News Corporation’s book publishing and real estate segments were the key drivers of the company’s revenues, recording quarterly profits increases of $83 million and $48 million respectively.

Book publishing’s 20 per cent quarterly increase in revenues overshadowed the segments 7 per cent ($122 million) yearly increase. The rise was attributed to general book sales and the 6 per cent yearly increase in digital sales, driven by audiobooks.

The quarterly EBITDA of the segment was up $32 million, or 82 per cent, with yearly EBITDA increased $45 million, or 23 per cent.

REA Group’s strong growth of 27 per cent led the digital real estate services segment’s total growth of 19 per cent in quarter four. This was primarily attributed to the favourable product mix and pricing increases in the Australian market.

Full-year real estate segment revenues increased 22 per cent, or $203 million, while REA Group profits improved 27 per cent to $666 million.

The inclusion of the merged Foxtel entity improved the subscription video segments revenues and segment EBITDA in the quarter, increasing $470 million and $73 million, respectively. During the period, Foxtel saw an increase in subscribers, led by the launch of digital on-demand platform Foxtel Now.

Segment revenue and EBITDA for the year increased $510 million and $50 million, respectively.

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