US sharemarkets lifted on Monday in response to news on advances in the war against the coronavirus. But dampening sentiment was the stalled talks by US Congress on a fresh aid package for the jobless. Shares in Apple rose 1.2% to record highs ahead of a stock split. The Dow Jones index rose by 378 points or 1.4%. The S&P500 index lifted 1.0% to record highs. And the Nasdaq index gained 68 points or 0.6% to a record closing high.
Seven West Media says its earnings have more than halved as the ongoing coronavirus pandemic wreaks havoc on the industry’s ability to generate revenue from advertising.
The major commercial media group flagged Australia’s advertising market had been severely impacted from the economic downturn sparked by COVID-19, with conditions remaining highly volatile and unpredictable for the first quarter of the current financial year.
For the financial year ending June 30, the company posted a statutory loss of $162 million.
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Seven West’s earnings before interest and tax were down 53.6 per cent over the period to $98.7 million, driven by heavy falls in the free-to-air TV market.
Its free-to-air TV market fell 14.1 per cent for the financial year, with the fourth quarter experiencing a plunge of 33.7 per cent.
Seven West chief executive James Warburton said the pandemic had accelerated its cost-reduction strategy.
“We have made material progress on our transformation plan despite the challenges that
COVID-19 has thrown at us,†he said.
“We have significant operating leverage with our lower cost base to provide greater upside on market recovery and drive significant value for our shareholders.â€
Significant items worth $352 million relating to impairment charges, which reduced the value of its assets, prompted the group to incur a before-tax loss of $293.9 million.
The company has a net debt position of $398 million despite actioning $170 million in gross costs cuts that included the renegotiation of its AFL agreement.
“In addition, we benefited from an incremental $51 million of temporary savings to respond to the sudden impact of COVID-19,†Mr Warburton said.
The weakened advertising market caused its revenue from continuing operations to fall 14 per cent over the financial year to $1.2 billion.
Business Reporter
Gerard Cockburn is a business reporter. Prior to joining The Australian, he has worked as a journalist for the Courier Mail and published in The Age.
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