Sky profit falls short of guidance

Sky Network Television yesterday reported a profit that missed earlier forecast guidelines, as revenue came in softer than expected.

The company reported earnings before interest, tax, depreciation and amortisation (ebitda) of $261 million for the year ended June, compared with the guidance range of $265 million to $275 million.

The result was down 2% on the previous corresponding period.

The reported net profit was $88.1 million, down 10% on the previous period.

ABN Amro Craigs broker Chris Timms said advertising revenue of $58 million was broadly in line with guidance, so the key driver of the weaker revenue performance was falling subscription revenue of $604 million.

That appeared to be due to lower residential digital subscriber numbers at the reporting period of 623,000, compared with the ABN forecast of 626,000; together with the lower take-up of multi-room by MySky HDi subscribers.

Costs were in line with forecasts except for broadcasting and infrastructure.

"As expected, there were no outlook comments, so we'll have to wait until the annual meeting in October," Mr Timms said.

Sky preferred to evaluate the first-quarter run rates before providing estimates.

It had set a target of a further 80,000 MySky HDi subscribers in the full financial 2010 year.

A key focus would be migrating the remaining 22,800 UHF subscribers by March 2010 and continuing to build the underlying subscriber base, he said.

The operating expenditure "hump" of the HD and studio upgrade was mainly over, and MySky HDi revenue was just starting, Mr Timms said.

Sky had declared a second-half dividend of 7c per share.

 

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