ARN Media Limited has reported its half-year results ending 30 June 2024, reporting revenues from ordinary activities of $168.1 million, up 1 per cent, or 4 per cent on a pro forma basis.

However, net profit after tax was impacted by changes to ARN's portfolio in Hong Kong and share of transaction costs, with underlying NPAT attributable to ARN shareholders down 19 per cent on a pro forma basis to $10.4 million. $3.5 million of the NPAT reduction was attributable to Hong Kong-based OOH subsidiary Cody Outdoor.

The company's digital advertising revenues remained strong, lifting 26 per cent to $11 million thanks to audience growth in digital streaming and podcasting.

Underlying depreciation and amortisation expense before significant items saw an increase of 30% to $13.2 million, following the commencement of a new advertising contract for Cody Outdoor in May 2024. Two new significant contracts are set to see Cody return as a key player in the Hong Kong advertising market, requiring an upfront working capital rebuild of A$12-15 million in H224.

Earnings before interest, tax, depreciation and amortisation (EBITDA) remained flat compared to the previous period at $35.5 million. The Group's balance sheet remains sound with net debt of $86.8 million and leverage on a pre-AASB 16 basis of 1.58 times EBITDA, before significant items. The company declared a fully franked dividend of 1.2 cents per share.

ARN Media CEO & Managing Director, Ciaran Davis, said the company was had an "ongoing critical lens on costs particularly given difficult market conditions, and our cost out program is on track to limit total people and operating cost growth to between 2- 4%, that will deliver $6.5 million permanent cost out in 2024."

"Our investment in digital audio is buoyed by the ongoing growth in the industry at a time when other parts of the media sector are struggling. It is a dynamic, strong, and evolving landscape with radio reaching 81% of the population, Australian podcast listenership one of the highest globally, and streaming radio listening in cars has risen by 75% in two years."

ARN Media Chairman, Hamish McLennan, highlighted the company's competitive operational performance in 2024 despite the economic challenges faced by the Australian media sector. "Critical to our performance were a number of key programs delivering increased and sustainable operating efficiencies, which are part of our $10 million annualised cost out program, ensuring we limit cost growth."

"These cuts reflect the tough environment facing Australian media. The industry needs market restructure and consolidation given the increasing pressures from global technology and media platforms and a government regulatory environment that has not kept pace. We have made no secret of the fact that we want to be part of industry consolidation and are very disappointed that our Indicative Proposal to acquire SCA was unsuccessful as it represented a compelling proposition for both ARN Media and SCA shareholders."

Looking forward, ARN Media is investing in new digital audio formats and technologies for commercialisation as it continues to build an integrated audio business. "We believe there is potential for further efficiencies for the remainder of this year and into 2025 and are continuing to evaluate our operating model including exploring how the business can benefit from using AI," Davis said.