Seven parent plunges with A$1.9bn loss

Seven West Media has posted a massive loss of A$1.89 billion (US$1.34 billion) in its 2015 full-year results.

Despite SWM’s commercial channel, Network Seven, leading the Australian free TV ratings for the ninth year in a row, various impairments relating to TV licences saw earnings plunge into the red.

Excluding these ‘significant items’ that totaled A$2.1 billion, SWM posted an underlying net profit after tax of A$209.1 million, in line with previous guidance and down 11.5% year-on-year.

The A$2.1 billion comprises A$961 million in goodwill from the first half of the financial year and A$929 million related to TV licences in the more recent half.

Australia’s commercial channels pay heavy TV licence fee levies, and are currently lobbying for these to brought down in line with territories elsewhere.

A government review is forthcoming, and SWM CEO Tim Worner said today: “We welcome the current review of the broadcast license fees by the federal government. We believe the government understands that local broadcasters are seriously disadvantaged relative to over the top competitors and we are hopeful of an outcome that brings us at least closer to fees paid by broadcasters in other territories.”

Total group revenues were down 4.7%, at A$1.77 billion, though operating costs were down 2.4% at A$35 million. Net debt has declined 37% to just over A$370 million after a capital raise.

The results for Seven were more encouraging. The channel took a 38.5% ratings share, SWM said, with ten of the top 20 Australian programmes.

SWM, which has online, magazine and newspaper assets, noted television now represents 76% of group earnings.

SWM chief Worner, who this week signed a new contract tying him down until 2018 despite local rumours about his future, pointed to cooking series My Kitchen Rules and home renovation show House Rules (pictured) as key ratings drivers.

He added Seven would produce a total of over 700 hours of scripted, factual, kids and reality programming this year, and pointed to international deals such as sending Home and Away to Hulu in the US and said a Stateside format deal for My Kitchen Rules was at an “advanced” stage.

Meanwhile, Seven and digital stablemates 7TWO and 7mate will be made available on all mobile platforms from December.