Sky TV half year results:
Revenue - $346m up 5.4pc
Profit - $42.7m down 16.5pc
Dividend - 7 cents per share
KEY POINTS:
Sky TV's profits fell 16.5 per cent in the six months to the end of December, despite increased revenue and an all-time high in subscriber numbers.
The pay television network today said it would pay a dividend of 7 cents per share, the same as last year,
despite net profit after tax for the six months to December 31, 2008 dropping to $42.7 million.
Sky shares have fallen 9 cents this morning to $4.10 each
This was mainly a result of investment in the new high definition (HD) platform and the impact of the recession on its free-to-air Prime channel's advertising revenue - which decreased 11.9 per cent to $12.6m.
Sky's operating costs increased by 14.6 per cent to $261.9m, put down to higher subscriber numbers, promotional discounts and costs associated with the Rugby League World Cup and Prime's new show, New Zealand's Got Talent.
There were also marketing costs associated with the launch of the HD platform.
Total revenue increased by $17.6m to $346.3m, an increase of 5.4 per cent compared to the same period last year.
Sky was today lauding an all-time high in subscriber numbers of 759,069 at December 31.
It represented a net gain of 10,493 subscribers for the six months compared to 9708 for the same period last year.
The launch of the new HD platform was a "spectacular success" with 51,485 new MySky HD subscribers as of December 31, said chief executive John Fellet.
"The period post the reporting date has been even more positive with a net gain of 11,703 additional subscribers as of 12 February 2009 compared to 6798 over the same period last year - the months of January and February following the Rugby World Cup (in 2007) were particularly slow.
"Subscriber growth increased when compared to last year, indicating that we can deal better with a recession than we can with the All Blacks not doing well in a World Cup," he said.
"Churn", a measure of subscribers who disconnect their service, remained relatively low, with gross churn up slightly to 14.8 per cent from the comparative period clearly showing that subscribers continue to receive value from the Sky service.
The amount of time subscribers actually spend watching Sky channels has continued to grow with nationwide share of viewing reaching 31.8 per cent.
For the first time viewership on all Sky channels, which launched in New Zealand in 1990, was greater than that on any of the free-to-air channels, he said.
Fellet said the company had a strong debt profile with two sources of debt funding.
It had a $375m bank facility, of which $314m was drawn upon, and $200m in retail bonds that matured in 2016.
Shares in Sky TV, 44 per cent owned by Rupert Murdoch's News Corporation, lost 5 cents this morning, down to $4.14.
- NZPA