Television New Zealand is blaming higher programming costs for a fall in underlying profits.
Chief executive Kevin Kenrick said earnings of $27.9 million were down $4 million (12.2 per cent) on the previous financial year to June 30 because of rises in the cost of programming, particularly overseas programmes.
It is understood this is due in part to inflation clauses in long-term programming deals with Unites States studios.
TVNZ reported an after-tax profit of $14.2 million compared with $2.1 million last year. Last year's low result was due in part to the $8.8 million writedown of TVNZ's TiVo investment to be worth nil on the books.
In 2011-12, advertising revenue was up $9 million on the previous year to $313.7 million, and TVNZ increased its share of television advertising revenue to 62.2 per cent from 61.6 per cent the year before, with increases largely at the expense of MediaWorks.
Overall, Kenrick said TVNZ secured 92 per cent of the total market growth for the 12 months to June 30. The after-tax profit of $14.2 million includes the $5 million impairment for the remaining stake in the Avalon production studios in the Hutt Valley, which is in negotiation for sale, and for analogue transmission equipment.
The results also reflect a share of the start-up costs of the Igloo joint venture, 49 per cent owned by TVNZ and 51 per cent by Sky TV.
TVNZ paid the Government a dividend of $11.3 million, 70 per cent of the net profit with non-cash impairment added back in. The 2011-12 result reflected a six-month period when former chief executive Rick Ellis was in charge, while Kenrick started near the end of the second half.