• Total Group Revenue and Other Income: $727 million, down 6% from the first half of FY24.
• TV Advertising Revenue: Declined by 6%.
• Underlying Revenue: Down 1% after adjusting for the Olympics and FIFA Women's World Cup.
• Total TV Revenue Share: Increased by 0.5 points to 41.5%.
• Operating Expenses: $635 million, down 2% from the prior corresponding period.
• EBITDA Before Significant Items: $92 million, down 26%.
• EBIT Before Significant Items: $71 million, down 33%.
• Net Profit After Tax (Excluding Significant Items): $37 million, down 41%.
• Statutory Profit After Tax: $18 million.
• Basic EPS: $0.011.
• Underlying EPS (Excluding Significant Items): $0.024.
• Net Debt: $260 million with leverage of 1.7 times.
• Cost Guidance for FY25: $1.2 billion to $1.21 billion, a decrease of $20 million to $30 million year on year.
• 7plus Audience Growth: Total audience increased by 36% in the first half.
• Cricket Revenue Growth: 16% year on year.

• Warning! GuruFocus has detected 6 Warning Signs with ASX:SWM.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Seven West Media Ltd (ASX:SWM) reported a 43% increase in 7plus audience, indicating strong digital growth.
• The company achieved a record TV revenue share of 41.5% for a non-Olympics period, reflecting effective content strategy.
• Cost management efforts resulted in a 2% reduction in first-half costs, aligning with their guidance of a $20 million to $30 million decrease year-on-year.
• The launch of 7plus Sport, including cricket and upcoming AFL content, attracted 347,000 new registered users, with a significant portion in the high-value 18 to 54 demographic.
• Seven West Media Ltd (ASX:SWM) is optimistic about the second half, with Q3 bookings tracking up in low single digits and expected revenue growth from AFL streaming and the federal election.

Negative Points

• Total group revenue and other income declined by 6% compared to the first half of FY24, with a $48 million decrease.
• EBITDA before significant items fell by 26% to $92 million, reflecting the challenging market conditions.
• Underlying net profit after tax, excluding significant items, decreased by 41% to $37 million.
• The company faced a $14 million fair value loss adjustment on its Seven West Ventures portfolio, impacting financial results.
• The non-renewal of the Meta agreement contributed to a decline in other revenue, affecting overall financial performance.

Q & A Highlights

Q: Does the expectation of modest earnings growth in the second half account for the negative impact of the Meta deal ending? A: Yes, the expectation of modest earnings growth does take into account the negative impact of the Meta deal ending. - Jeff Howard, CEO, CFO, Managing Director

Q: What is your level of visibility into the remainder of Q3 and Q4, given the short market? A: For January and February, broadcast bookings are well advanced, with digital revenue opportunities continuing to arise. March bookings are about 70-75% of expectations, with AFL starting on March 6. Q4 visibility is less clear, but there are good forward bookings. - Jeff Howard, CEO, CFO, Managing Director

Q: Are you seeing any spend coming in ahead of the federal election, and what do you expect the benefit will be? A: We are starting to see some government spending through agencies and some initial spending from Clive Palmer. The election has not been called yet, so spending is expected to increase once it is. We anticipate the election will drive some benefit for Seven and the West in the second half. - Jeff Howard, CEO, CFO, Managing Director

Q: Can you discuss the aspiration for flat costs into FY26 and where you see key areas of efficiency? A: We have a strong track record of finding cost efficiencies. We will continue to tighten content investment and look for more efficient ways of operating. The new AFL contract and inflation are headwinds, but we aim to maintain costs flat by finding efficiencies. - Jeff Howard, CEO, CFO, Managing Director

Q: How is the adoption of virtual oils as a currency progressing, and is there more upside? A: Virtual oils have been adopted more widely and are integral to our operations, including Phoenix. There is potential for more upside as we focus on providing high-quality audience measurement. - Jeff Howard, CEO, CFO, Managing Director

For the complete transcript of the earnings call, please refer to the full earnings call transcript.