Nine Entertainment Co has released its financial results for the six months to 31 December 2023, showing a mixed performance amid challenging market conditions including an 11% dip in broadcast revenues driven by a soft free-to-air advertising market.

The company reported a revenue of $1.4bn, a modest increase of 2% compared to the same period in the previous year. Net Profit After Tax (NPAT) stood at $114m, including a post-tax specific Item expense of $36m. However, the Group EBITDA, before specific Items, of $316m was down 15% on H1 FY23, reflecting weaker economic and advertising market conditions. Profit After Tax was $134m, a significant drop from $183m in the corresponding period.

While Nine's Metro Free-to-Air (FTA) broadcast and Broadcast Video on Demand (BVOD) audiences grew for the financial year-to-date, leading to revenue share in both Metro FTA and BVOD in calendar 2023, Nine Network revenue was down 11% in the six months to $508 million. Reflecting weaker conditions, metro free-to-air was down 13% for the half, with nine attaining a share of 39%. On a more positive note, the group said its metro revenue share for the 2023 calendar year was 40.1%, up marginally on the previous year and a 20-year high. This included a primary channel share of 39.8% of the 25-54 demographic. 9Now's revenue growth of 6% for the half resulted in a 45% revenue share in the traditional BVOD market.

Subscription & licensing revenues (excluding Domain) grew by 8% to 30% of wholly-owned Group Revenue. Domain's EBITDA contribution to Nine grew by 37%, primarily reflecting the stronger housing market, particularly in Sydney and Melbourne.

Digital revenue growth of 45% in Audio, with radio industry leadership in streaming Audiences, was another bright spot. Against this, the 4-city Metro linear radio ad market slowed across the half, with revenues down 4% on the previous corresponding period.

In the six months to December, broadcast revenue overall dropped 9% to $654.6m, while costs remained flat. The broadcast division, which comprises Total Television (Nine Network and 9Now) as well as Nine Radio, reported EBITDA of $164m.

Nine's Publishing division also softened, illustrating the weaker advertising market and economic uncertainty, reporting a 4% dip in revenue to $289m, and a combined EBITDA of $78m, down 19% on H1 FY23.

Nine Chief Executive Officer Mike Sneesby said notwithstanding the impact of challenging economic conditions on the broader advertising market, the breadth of Nine’s business underpinned some key operational highlights across the half.

“I am particularly pleased with the performance of our subscription businesses - with Subscription and Licensing revenues at Nine’s wholly owned businesses, Stan and Publishing, together growing by around 8%, to more than 30% of Group revenue ex Domain. At Stan, 11% revenue growth and more than 40% EBITDA growth is testament to Stan’s strong positioning in Originals and Sport which continues to pay off, as well as its focus on cost efficiencies," he said.

Over at Stan, the 6 months to December 2023 saw 41% EBITDA growth highlighted both strong content and cost performance across the half. Revenue growth of 11% for the period was underpinned by both a solid subscriber performance, with paying subscribers currently above 2.2m, and a further 11% lift in average revenue per user. An 8% lift in costs primarily reflected an increase in content costs and marketing spend, the media company stated.

Nine said it continued to strategically increase its investment into premium content and technology, while reducing other operating costs. It noted cost performance was strong with almost $30m of underlying cost efficiencies delivered across the half.

Within Publishing, the 9% growth in digital subscription and licensing revenue at Nine’s metro mastheads, inclusive of price increases, more than offset the decline in print subscription revenue, Sneesby continued. Nine’s Publishing division includes the core Metro Media business, as well as nine.com.au, Pedestrian Group and Drive.

“We acknowledge the Government's recent comments confirming its support for the essence of the News Media Bargaining Code and its intent to enforce the Code, including by designation of digital platforms if required. Notwithstanding these comments, the media landscape has evolved significantly since the Code was drafted and requires the Government's urgent attention to ensure Australian media companies are being fairly compensated for the ways in which global digital platforms are deriving value from our content,” Sneesby said. “For example, Nine's premium video content continues to drive huge audiences on social media platforms, while we are also witnessing the rapid growth in generative-AI services which utilise our public interest journalism to build and train their models.

“As our audiences become increasingly digital, the mutual benefits of the combined media and data assets of Nine and Domain are becoming more significant. We will continue our strategic focus on Domain, as we leverage the strength of the Nine Group across the Nine-Domain relationship."

Sneesby acknowledge Total Television business had been impacted by the advertising cycle, yet insisted audience performance this half had been strong.

"FY24 to date, Nine’s audiences have shown clear growth in Total People, both broadcast FTA and BVOD, and also in the 16-39s which has typically been a more difficult demographic to reach. The strength of this audience performance gives us renewed confidence in our revenues once the advertising market begins to recover, and we expect to retain leadership from a revenue share perspective through 2024,” Sneesby said.

“I am very pleased with the way the Company responded to the broader economic challenges in the second half of calendar 2023. We have enhanced our competitive position. We are positioned well for the future. The breadth of our different businesses has proven its worth in these conditions,” Nine chairman, Peter Costello, added.