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Australia’s Ten slumps on rising costs, gloomy profit forecast

Australian Ten Network’s share price fell almost 10% as the free-to-air broadcaster said annual revenues will decrease and that costs are rising.

MasterChef-Australia-auditionsTen issued fresh financial guidance for the year ahead and told investors that its TV revenues will decrease between 3.5% and 4.5% in the 2014 financial year, which runs to end-August.

It also said that FY14 cost will increase 8% because of its coverage of one-off events including the Sochi Winter Olympics and the Glasgow Commonwealth Games, which Ten said, will add A$55 million (US$51.7 million) to its programming costs.

“Ten remains firmly focussed on improving ratings by managing costs to ensure that maximum funds are available for reinvestment in prime time content,” the company said.

It added that the benefit of its latest cost reduction program will be reflected in FY15 and it will provide specific forecasts when it published FY14 results in October.

The broadcaster noted that its ratings have improved since Easter with the launch of the new season of cooking competition series MasterChef (pictured). It said there should be an accordant uptick in advertising revenue, but also noted the market remains ‘volatile’.

The ASX-listed company’s share price fell 9.26%, to A$0.245, in the wake of the new guidance.