TVNZ records another decline in revenue

3.00pm

The fortunes of TVNZ have continued to decline with a fall in revenue and profits for the year ended June 2002.

TVNZ's annual report blamed a slight fall in revenue of $3.8 million to $477.3 million on "difficult market conditions".

The company as a whole recorded a net surplus after taxation of $19.3 million for the year and paid $8.6 million in dividends.

TVNZ chairman Ross Armstrong said that in a challenging year for both the television and transmission businesses the company's operating surplus before interest, tax and non-recurring expenditure was $43.8 million.

The net surplus after taxation for the television business was $5.1 million, a reduction of $2.7 million on the previous year, largely due to non-recurring expenditure in the 2002 financial year.

The most significant one-off expenditure was a $5.2 million write down in the value of the broadcast rights for the 2003 Rugby World Cup.

These rights had been purchased from Rugby World Cup Limited in 1996 for US$10 million (now $21.17 million). As a result of the IRB's decision to award the sole hosting rights for this event to Australia, TVNZ has reduced their value.

Dr Armstrong said there were some signs of hope for the television business with a slight bounce back in advertising in the second half of the year after a period of steady decline.

The television business brought in advertising revenue of $285.7 million, an increase of $1 million on the previous year.

TVNZ chief executive Ian Fraser said the television business had performed well compared with international broadcasters.

"TVNZ's ability to grow its advertising revenue during the year is a reflection of TV One and TV2's strong position in the market," Mr Fraser said.

Dr Armstrong said the pending TVNZ Bill, which will see the company changed from an SOE into a Crown-owned company, would help TVNZ meet its new public broadcasting mandate.

"While the television business will be required to focus on giving effect to its charter while maintaining commercial performance, the transmission businesses, which include BCL and TVNZ Australia, will continue to operate in much the same way as an SOE with a strong emphasis on commercial performance," Dr Armstrong said.

Transmission-related revenues for the year were $114.5 million, a decline of $18.9 million over the previous year. Net surplus after taxation for the transmission businesses was $14.2 million, a reduction of $7.9 million on the previous year.