NZME (NZM) H1 2024 earnings summary

Executive summary

• Operating revenue rose 3% year-over-year to $171.0 million, with digital revenue up $5.9 million to $50.1 million and net profit after tax at $1.9 million, down from $2.0 million in H1 2023.

• OneRoof achieved profitability, with digital listing revenue up 63% and listing upgrades up 70% year-over-year; Auckland listings increased 38%.

• Digital audio revenue grew 33% year-over-year, podcast downloads reached 48 million (up 12%), and digital subscriptions rose 11%.

• NZME maintained strong audience reach, engaging 9 out of 10 New Zealanders monthly across platforms.

• Despite challenging market conditions, digital transformation and cost controls supported stable EBITDA and continued investment in strategic priorities.

Financial highlights

• Operating EBITDA was $21.4 million, nearly flat compared to $21.3 million in H1 2023.

• Statutory net profit after tax was $1.9 million, slightly down from $2.0 million year-over-year.

• Cash flow from operations improved to $12.1 million from $8.8 million year-over-year.

• Interim dividend declared at 3.0 cents per share, payable September 2024.

• Net debt at 30 June 2024 was $30.0 million, up from $18.0 million at 31 December 2023, reflecting seasonal factors and dividend payments.

Outlook and guidance

• EBITDA for FY24 is expected at the lower end of the $57.0–$61.0 million guidance range.

• Advertising revenue growth slowed from 4% in Q1 to 2% in Q2, with Q3 tracking at 1% year-over-year.

• $6 million in annualized cost reductions to take effect in H2 2024, with most benefits realized in the second half.

• Net debt is projected to reduce by year-end, with leverage ratio returning to the low end of the 0.5–1.0x target range.

• Anticipates improved market conditions as interest rates are expected to decrease, supporting further growth in OneRoof.