Ten profits dip on ad weakness
EmptySYDNEY -- Ten Network Holdings, the owner of Australia's Ten TV network as well as outdoor advertising business Eye Corp., reported a dip in profits for the first half of the fiscal year Wednesday, but executives forecast an improvement as the ad market strengthens this year.
Ten Network Holdings' net profit after tax fell 12% to AUS$37.7 million ($30.6 million), largely the result of a weaker ad market and higher programming costs, executives said. But Ten remains the most profitable of the Australia's three commercial TV networks.
While profits fell, revenue increased 5.9% to AUS$492 million ($394 million). Ten's television business contributed AUS$402.9 million ($322 million) to group revenue, with TV earnings at AUS$142 million ($113.6 million).
Ten's results come as majority owner, Canada's CanWest Global Communications Corp., is seeking a buyer for the network.
CanWest said in October that it was "examining options" for its 56.4% stake in Australia's third-largest commercial TV network after the federal government said it would repeal cross-media and foreign-ownership laws.
In January, CanWest distributed a confidential information memorandum to interested bidders, but few details have emerged. The company has a market valuation of about AUS$3 billion ($2.4 billion).
Despite the profit dip, Ten executive chairman Nick Falloon remained upbeat about the position of the company, saying there were signs of a "progressive strengthening" in the ad market.
In December, Ten -- the home of "House," "Big Brother" and "Australian Idol" -- secured a rate and volume increase in annual renewal negotiations with advertisers and will "strive to maintain its 30% revenue share in calendar 2007," Falloon said.
Falloon said he expects an improvement in the network's earnings this fiscal year.
He added that an Australian election scheduled for this year will help boost the advertising market. "With all of Ten's 2006 hits returning, plus a strengthening international lineup, Ten is confident in its competitive position," he said.
Ten television CEO Grant Blackley said the network is "highly competitive" in its target 18-49 demo, though it is currently finishing second to the Seven Network in that demo.
" 'Biggest Loser,' 'Bondi Rescue,' 'Saving Babies' -- we're delighted with the respective performances of those three domestic programs, and certainly very happy with the U.S. product that's on air at this time," Blackley said.
During the first half of the fiscal year, the network expanded an agreement with CBS Paramount, giving it CBS news and factual programming including "Dr. Phil" and "Late Night With David Letterman," while a new long-term output deal with 20th Century Fox Television takes effect in September. Ten also renewed its Australian Football League rights.