Sky Network Television (SKT) H1 2025 earnings summary

Executive summary

• Interim and underlying results were impacted by accelerated satellite migration, which became the top priority and disrupted original FY 2025 plans and revenue initiatives, with costs heavily weighted to H1 and economic headwinds affecting performance.

• Streaming, advertising, and broadband segments delivered 6% year-on-year growth, partially offsetting declines in traditional Sky Box revenue.

• The business reported a small net loss after tax of $1.7m, but adjusted net profit after tax was $10.9m, reflecting one-off items.

• Interim dividend increased 21.4% to 8.5cps, reflecting board confidence and sustainable free cash flow.

Financial highlights

• H1 2025 revenue was $384.8m, down 2% year-on-year, with streaming, broadband, and advertising partially offsetting lower Sky Box revenues.

• Underlying EBITDA for H1 was $60.7m, down 25% year-on-year, mainly due to higher programming costs and lower revenue.

• Adjusted capex for H1 was $38.5m, up 4.4% year-on-year, focused on satellite migration and technology upgrades.

• Free cash flow was $7.5m, slightly ahead of last year, with a closing cash balance of $27.8m and an undrawn $100m bank facility.

• Interim dividend of 8.5cps approved, with $18m returned in dividends in H1.

Outlook and guidance

• FY25 revenue guidance narrowed to $755m–$765m, EBITDA expected at the lower end of previous range, and NPAT to $35m–$42.5m.

• Programming costs will drop significantly in H2, with $30m in expected savings as major events are not repeated.

• Capex guidance unchanged, with satellite migration capex expected at $10–$20m.

• Dividend guidance of at least 21cps for FY25 reaffirmed, with a target of 30cps by FY26.

• Management expects a stronger H2 due to cost timing and anticipated economic recovery.