State-owned broadcaster Television New Zealand paid a smaller-than-expected dividend to the Government as more-expensive foreign programming eroded the company's underlying earnings.
The broadcaster paid a dividend of $11.3 million in the 12 months ended June 30, down from $13.8 million last year and smaller than the $12.8 million forecast in its statement of corporate intent. Underlying earnings shrank 12 per cent to $27.9 million, slightly ahead of the $24 million forecast.
Net profit surged to $14.2 million from $2.1 million after the impact of the ill-fated TiVo venture washed through the broadcaster's books, just ahead of the $14.1 million forecast in the statement of intent.
"Increases in the cost of television programming, particularly overseas programming, were the primary driver of lower underlying earnings," the company said in a statement.
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The broadcaster's operating revenue grew 1 per cent in the year to $381.8 million, with a 3 per cent lift in advertising sales to $313.7 million.
The company increased its TV advertising share to 62.2 per cent from 61.6 per cent, nabbing 92 per cent of total growth in the period, it said.
TVNZ's more-expensive overseas programming comes as the kiwi dollar's strength increases local buyers' purchasing power and at the same time as rival MediaWorks NZ winds down its reliance on CBS Broadcasting in favour of New Zealand-made content.
The broadcaster took a $5.7 million impairment charge on the cost of switching off the analogue transmission network.