WINNIPEG – A 6.6% decline in revenue and a 26% drop in EBITDA shows just how hard the Australian ad market has turned around on CanWest Global Communications within a year.
At this time last year, the company’s Oz ops, The Ten Group reported year-end records in revenue (A$956 million) and EBITDA (A$342 million). At the end of fiscal 2006, those numbers were A$893 million and A$253 million, respectively. (An Australian dollar is worth about $0.86 Canadian)
Ten owns CanWest’s Australian television and out-of-home advertising operations. "The decline in revenues and EBITDA from Ten’s all-time records set in fiscal 2005 was the result of a down-turn in the Australian broadcast television advertising market," says the press release. CanWest holds a 56.4% economic interest in TEN.
Ten’s television operations recorded an 8.9% decline in revenues to A$765 million for the year with EBITDA of $229 million, 27.5% below the EBITDA of A$316 million recorded for the previous fiscal year.
"However, ratings and audience share remained strong with Ten heading towards its sixth annual win in its target under 40 demographic, while also winning the number one position in the wider 18-49 demographic," said the company.
Eye Corp., Ten’s wholly-owned out-of-home advertising subsidiary, generated a 10% increase in revenue to A$129 million. EBITDA of A$24 million for fiscal 2006 was 8.5% below the $26 million recorded for the previous year, primarily due to expenses associated with Eye’s successful international expansion in fiscal 2006. Eye won new advertising concessions at Singapore’s Changi International Airport, the three airports of the Manchester Airports Group in the UK, and at over 200 shopping malls in 42 states across the United States.
For the quarter ended August 31, 2006, Ten reported a decline of 5% in consolidated revenues to A$221 million from A$232 million for the fourth quarter last year. Consolidated EBITDA for the fourth quarter was down by 28% to A$52 million compared to A$73 million for the fourth quarter of fiscal 2005.
"We knew 2006 would be a challenging year," said executive chairman, Nick Falloon. "To have achieved industry-best margins, improved commercial share and higher absolute audience numbers in every major demographic, despite the market down-turn is an outstanding achievement. Ten’s strategy to invest in its key programming franchises, Big Brother, Australian Idol and AFL Football, as well as hit international shows and original Australian series, while maintaining disciplined focus on efficiency and spending will ensure that we are well positioned for the market’s recovery."
"It was inevitable that the Australian advertising market would take a respite from the exceptional advances made over the past several years," added Tom Strike, president of CanWest MediaWorks International. "We are encouraged by indications that the market is beginning to firm and that Ten is gaining revenue market share at the expense of its competitors, commensurate with its superior ratings performance."
CanWest received a total of A$102.7 million in distributions from its Australian operations in fiscal 2006 (about C$86.3 million).
