4 Sep 2008

TVNZ cost-cutting helps it back into the black

6:21 am on 4 September 2008

In a dramatic turnaround, TVNZ has recovered from last year's loss to make a $19.4 million profit on the back of cost-cutting and steady advertising revenues.

The state broadcaster lost $7 million last year due to restructuring costs, including redundancy payments for some of the 125 staff it shed.

In contrast to last year, when no dividend was paid, TVNZ will pay a dividend to the crown of just over $10 million.

TVNZ's operating earnings before non-recoverable items rose to $27 million in the June year, representing a $14 million turnaround on the previous year.

Despite the economic downturn, the broadcaster's advertising revenue increased 0.9% to $315.5 million.

Chief executive Rick Ellis says it is a good result for the first year in a three-year plan to turn round the business, but there is some uncertainty ahead, as in the current economic climate advertising clients may decide to cut back on marketing.

Rick Ellis says the exact cost to TVNZ of broadcasting the Olympics will be collated when its team returns from the Paralympics. He says the broadcaster will not have made a profit from its coverage.

Meanwhile, 3 News says it has a significant ratings lead in some demographics over its competitor TVNZ's One News, in the annual viewer share figures.

3 News says it is leading by 11% in the 18 to 49 year old demographic, and is ahead by 37% in the same age group for the Auckland urban demographic.