Prime Media profit halves as ‘difficult period’ for regional media rolls on

Prime Media Group's profit has fallen by 56 per cent to $4.46 million in the first half of the financial year, as chief executive Ian Audsley warned regional advertising market conditions had not improved since the start of the bushfire season.

The result, which came after the broadcaster’s failed merger with affiliate partner Seven West Media, showed a 7 per cent decline in revenue to $90.8 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 47.4 per cent to $11.5 million.

Prime Media Group chief executive Ian AudsleyCredit:Alex Ellinghausen

Prime led revenue share for the period with 41.2 per cent of the regional broadcast market. Mr Audsley said earnings were affected by conditions, including the impact of the bushfires, and competition for local advertisers from global technology giants Google and Facebook.

"As widely reported, it has been a difficult time in regional Australia over the past six months. Regional television advertising markets were challenged by a confluence of events as early as October 2019, when we reported the Tamworth fires in northern NSW," Mr Audsley said.

"The 2020 Tokyo Olympics will be a key focus for Prime in the lead up to the Olympic broadcast later this year. The Olympic broadcast has attracted significant interest from national advertising sponsors, with major advertising packages being negotiated."

Prime's future was left in limbo in December after a $64 million bid by Seven West Media was blocked by shareholders, including WIN Corp owner Bruce Gordon and regional media proprietor Antony Catalano.

The broadcaster and other media businesses are under increasing financial pressure as a weak local economy and factors such as coronavirus and the national bushfire crisis hit the bottom line.

Rival Southern Cross Austereo, which cut 4 per cent of its workforce at the end of last year, saw revenues fall to $308 million for the half year to December and earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 27.7 per cent to $67.5 million.

EBITDA for the 2020 financial year is expected to be between $22 million and $24 million, while the broadcaster expects net profit in the range of $8 million to $10 million. Prime said a dividend will not be paid because of the decline in advertising spend in the sector.

Prime Media closed down 3.3 per cent at 14.5¢ a share on Tuesday.

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