Nine Entertainment Co. (NEC) H2 2024 earnings summary

Executive summary

• Group revenue declined 3% year-over-year to AUD 2.62 billion, with EBITDA down 12% to AUD 517 million and statutory net profit down 31% to AUD 134.9 million, reflecting challenging advertising conditions.

• Digital revenue now represents 50% of group revenue, up 5% year-over-year, driven by growth in streaming, Metro Media, Domain, and Audio.

• Subscription and licensing revenue grew 5%, now 31% of group revenue, supported by price increases and strong subscriber trends.

• Cost reduction initiatives removed AUD 65 million in costs, with AUD 47 million recurring, and a further AUD 50 million targeted for FY25.

• Successfully executed a digital-first Olympics strategy, delivering record audiences and over AUD 160 million in revenue from the Paris Games.

Financial highlights

• Group revenue for FY24 was AUD 2.62 billion, down 3% year-over-year; Group EBITDA was AUD 517 million, including an AUD 8 million benefit from a contract write-down.

• Net profit after tax and minorities (before specific items) was AUD 189 million; statutory net profit was AUD 135 million after AUD 82 million in specific item costs.

• Basic EPS dropped 25% to 11.7 cents; dividends per share were 8.5 cents, down 23%.

• Cash flow from operating activities (excluding Domain) was AUD 280 million, with a cash conversion rate of 93%.

• Final fully franked dividend of AUD 0.045, representing a 73% payout ratio and a 5.7% yield.

Outlook and guidance

• FY25 expected to see total TV revenue growth, driven by Olympics and BVOD expansion to 20% of TV revenue; Q1 Metro FTA ad revenue expected up nearly 10%, with 9Now revenue up ~50%.

• Stan revenue growth anticipated to outpace cost increases, with continued ARPU and subscriber strength.

• Publishing revenue and earnings expected to decline due to loss of Meta revenue, but digital subscriptions to grow in low double digits in Q1.

• Domain expects stable EBITDA margins in FY25, with cost growth in high single to low double digits and new 'For Sale' listings up 4% in early FY25.

• Ongoing cost efficiencies targeted, with AUD 50 million in further cost reductions planned.