Nine Entertainment has slipped to a first-half loss of $236.
9 million after falling revenue prompted another big writedown against its free-to-air TV network.
Nine on Thursday said it was making the $260 million non-cash impairment after revenue from its TV business for the six months to December 31 fell 5.3 per cent.
But Nine said its ratings performance improved after a drop in advertising and viewer share during the Olympics and that the momentum had continued into 2017.
The broadcaster expects second-half revenue share to be up on the first half and on the prior corresponding period.
“We are very pleased with the progress we have made in the past six months and have delivered on our commitment to compete more effectively in free-to-air television at the start of the 2017 ratings year,” chief executive Hugh Marks said.
The Rio Olympics on rival Seven had hit both the size of the advertising market and Nine’s share of it, Nine said.
Mr Marks said recent audiences were up 13 per cent, with commercial audience share up 3.9 percentage points.
Nine said the improved ratings should translate to fourth-quarter revenue and positive momentum heading into the 2017/18 financial year.
The outlook helped push Nine shares to be 7.8 per cent higher at 1518 AEDT, although at $1.04 they were still about 60 per cent lower than in April 2015.
CMC Markets chief markets strategist Michael McCarthy said the results looked reasonable.
“They’re talking a strong game and, once you strip out the impairment charges, the underlying EBITDA looks OK,” he said.
“As long as the news is not disastrous at this share price levels, they’re likely to get a bit of value support.”
Underlying EBITDA (earnings before interest, tax, depreciation and amortisation) fell 6.4 per cent and adjusted net profit for continuing operations – excluding significant items – was down 4.3 per cent to $75 million.
Nine said it expects full-year EBITDA to be within published analysts’ forecasts of $158 million to $187 million.
The total $338.5 million in pre-tax specific items included the previously announced $85 million cost of extricating itself from its expensive obligation to broadcast Warner Bros’ US dramas and comedies.
Mr McCarthy said there could still be more impairments to come, with long-term concerns about the earnings capability of free-to-air TV.
“They are getting down there but I suspect at some stage they’ll need to be written down to zero,” Mr McCarthy said.
NINE’S HY HIT
* Net loss $236.9m v $320.8m profit
* Revenue down 4pct to $662.7m
* Interim dividend down 3.5 cents to 4.5 cents, fully franked