Nine Entertainment Co. (NEC) H2 2024 earnings summary

Executive summary

• Digital revenue now represents 50% of group revenue, up 5% year-over-year, driven by growth in streaming, Metro Media, Domain, and Audio, with digital-first strategies delivering record audiences and over AUD 160 million in Olympics revenue.

• 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.

• Cost reduction initiatives removed AUD 65 million in costs, with AUD 47 million recurring, and a further AUD 50 million targeted for FY 2025.

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

• Continued investment in premium content, technology, and AI to drive audience engagement and operational efficiencies.

Financial highlights

• Group EBITDA margin fell 2.1 pts to 19.8%, with group EBITDA at 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.

• 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 73% payout ratio and a 5.7% yield.

Outlook and guidance

• FY 2025 expected to see total TV revenue growth, driven by Olympics and BVOD expansion to 20% of TV revenue, with Q1 Metro FTA ad revenue expected up nearly 10% and 9Now revenue up about 50%.

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

• Publishing digital subscription revenue growth expected in low double digits, but overall revenue and EBITDA to be down due to loss of Meta revenue.

• Domain expects ongoing growth, with new 'For Sale' listings up 4% in early FY25 and stable EBITDA margins despite cost growth.

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