Total revenue for TVNZ was down 1.9 per cent, or $3.3m, to $175.7m after its advertising revenue fell from $170m to $163.8m because of lower demand off the back of Covid-19.
But its operational expenses also dropped, largely because of lower spending on content as a result of Covid-19 supply chain impacts.
Its expenses were down 21.5 per cent, or $32.8m, to $119.9m - with $24.2m of the decrease attributed to lower content spending.
TVNZ also cut $8.6m in costs across the business.
"When you look on the cost reductions year on year, some of those were intentional and desirable, and others less so," Kenrick said.
If there was more availability of content, we would have more on content. The lockdown restrictions have had an impact on productions both locally, but even more significantly internationally."
The bet on local content offers TVNZ at least some certainty as the world remains in the grips of the pandemic.
"It just so happens that the production environment in New Zealand is more favourable than in many other countries," Kenrick said.
This will come as welcome news to local production companies, but TVNZ may also face some competition for production staff, given the number of major international shows currently being produced here.
"There are capacity constraints in terms of the supply of content in countries like New Zealand, where we're able to produce quite freely, whereas elsewhere in the world there's deferment and delays in terms of production."
Earnings before interest, tax, depreciation, amortisation and fair value adjustments was $47m, up from $15.8m.
TVNZ chief executive Kevin Kenrick said TVNZ had adopted a three-phased approach to the impacts of Covid-19 on the business to refocus, recover and reimagine.
"Halfway through this financial year our financial position has recovered strongly and the business is set up well to accelerate our digital transformation plans and reimagine the future of TV."
Repaying wage subsidy
Kenrick said TVNZ generated $48.2m in cashflow from operating activities for the six months and was confident it had sufficient cash on hand to fund itself without needing to access capital from the Share Subscription facility negotiated last year.
"Based on this improved outlook, the TVNZ board has decided to repay the wage subsidy of $4.9 million received in 2020. TVNZ is grateful for the assistance offered by the Government at a time of great uncertainty and significant income reduction."
Kenrick said the standout programme performer in the first six months had been local news and current affairs shows with the primetime daily news programmes attracting record audiences.
He said the positive audience and revenue momentum generated in the first half of the financial year had continued into 2021 and TVNZ was on track to significantly exceed its financial year 2021 Statement of Performance Expectations.
RNZ-TVNZ merger
The other major question that continues to hang over TVNZ is whether the organisation will eventually merge with RNZ.
This month, reports that RNZ staff were moving into a building currently occupied by TVNZ were met by speculation that a merger might be imminent.
Kenrick advised not to read too much into this.
"I'd put that down to the sales skills of the landlord rather than anything else," Kenrick said.
"Minister [Kris] Faafoi has been really upfront about his intention and what he's looking to do in the public media space. From a TVNZ point of view, our focus is the mandate we've got right now."
Kenrick did not, however, write off the possibility of a merger happening at some point.
"If we continue to have great content and attract scale audiences and deliver for our advertisers, that's a good thing for us to do in our current environment, and it would also be a really good thing to contribute towards a future public media entity if that's where we end up."
- Additional reporting Damien Venuto
