Australia's PBL reports 5.7% drop in profit

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SYDNEY -- Australian media and gaming company Publishing and Broadcasting Ltd. reported a 5.7% drop in normalized profit to AUS$576 million ($460 million), which it attributed to a dilution of earnings from the sale of its traditional media businesses into a joint venture with private equity group CVC Asia Pacific, as well as startup costs from a casino venture in Macau.

However, the company said Wednesday that its profit was AUS$1.9 billion ($1.52 billion) when including a AUS$1.37 billion ($1 billion) gain from the sale of half its media assets.

With the Nine Network losing ratings and revenue share to rival Seven Network (HR 8/22), PBL's TV earnings for the year amounted to AUS$206 million ($165 million), down 4%, with TV revenue dropping 12.4% to AUS$762 million ($610 million).

Nine's share of the overall TV ad market in Australia dropped to 32.7% for the first six months of the calendar year, while it currently sits 1.6 ratings points behind Seven on a 26.3% share with 16 more weeks left in the ratings year.

PBL reported results for the Nine Network and ACP magazines to June 5 when it gave up majority control of PBL Media. Since then, it sold a further 25% of PBL Media to partner CVC Asia Pacific.

Better performing were PBL's pay TV investments. Its 25% stake in Australia's largest pay TV operator, Foxtel, added AUS$17 million ($13.6 million) to the company's bottom line after Foxtel reported a full year pretax profit of AUS$76 million ($61 million) on a 12% increase in revenue to AUS$1.4 billion ($1.12 billion).

Its 50% stake in the Premier Media Group, operator of the Fox Sports channels, gave PBL a profit of AUS$46 million (37 million) on revenue of AUS$300 million ($240 million).

At the same time, PBL wrote down its investment in film exhibition and distribution business Hoyts to AUS$143 million ($114 million), while booking a $19.5 million ($15.6 million) profit.

PBL jointly owns Hoyts with Western Australia Newspapers, and the partners are looking for a buyer for the business. In addition, PBL is selling its stakes in other noncore assets including Global Television and U.S. film producer New Regency.

PBL Media CEO John Alexander said the company's "equity accounted results reflect significant increases in pay TV and Internet contributions, more than offset by pre-opening losses attributed at our Macau joint venture together with reduced contribution for equity investments which now form part of PBL Media."

Later this year, PBL will further restructure its businesses, splitting off its stakes in its media businesses, into a listed holding company, Consolidated Media Holdings. A shareholder vote on that transaction is scheduled for October.
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