Television New Zealand is the latest media organisation to feel the impacts of Covid-19 on its balance sheet.
In the last financial year, TVNZ made an after-tax loss of $25.8m. That’s down from a $2.9m profit the year prior.
TVNZ’s chief executive, Kevin Kenrick, has described the year as “quite extraordinary”, saying it started with huge audience numbers for the Rugby World Cup, and ended with the challenge of Covid-19.
Mr Kenrick told 1 NEWS, “like many businesses we’ve been through a pretty bruising quarter, but I think we’ve come out of it a whole lot stronger, we’re well set up for the year ahead”.
Despite the loss, growth in advertising pre-Covid and close to $6m in Government relief has kept operating revenue stable at $310.8m, a slight increase on last year.
Advertising took a hit – with revenue down $7 million for the year.
“The first nine months of the year we were growing revenue at about five per cent year-on-year, in the last quarter it went backwards by 25 per cent,” said Mr Kenrick.
April saw a drop in advertising of 34 per cent. By June that decline was 16 per cent on the year before.
“What we have seen is really strong recovery… we’ve got reason to be optimistic”, said Mr Kenrick.
Digital advertising is growing - up 19 per cent.
Operating expenditure increased by $34.5 million to $320.6 million, driven by increased investment in local content.
A post-Covid staff restructuring saw $3.6 million spent on redundancies.
Despite this, the business has ended the financial year with $52.5m cash on hand, up over $18m on last year.
“It puts us in a really strong position," Mr Kenrick said.
With that, and several other cash facilities, TVNZ says it’s confident it can successfully navigate future market uncertainty.
Whether the company needs to draw on the cash facilities will depend on advertising, said Mr Kenrick.
“Given the changes we have made, we made those changes based on what we think the future’s going to be for the next 18-24 months, so if things go to plan, go to forecast, then I think we’re in pretty good shape,' he said.
“If things go pear-shaped then we’re going to need to go back and look at further costs.”
The company says the standout performer during the last quarter was undoubtedly 1 NEWS, with viewers flocking to daily news bulletins. It saw ratings grow by 33 per cent compared to pre-lockdown.
Mr Kenrick says the new financial year will see more investment in “compelling” local contact.
The supply of international content is becoming increasingly restricted due to slowdown in international productions.
But the company acknowledges the next year will be a year of recovery, as well as meeting the Government’s objectives for public media.
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