Sky TV has reported a $240.7 million loss in the year to June 2018, against a profit of $119.3 million. The profit, before a goodwill impairment charge, is an increase of 2.6 percent on the previous year.
The Sky Board agreed to reduce the carrying value of Sky’s goodwill asset from $1.43 billion to $1.07 billion, resulting in this year’s large net loss. This is a non-cash charge that has no impact on Sky’s 2018 cash flows or banking covenants.
Subscriber numbers also took a hit, down to 768,000 customers from 824,782 in the previous year. The bulk of customers left in the first six months of the financial year, with only 11,049 fewer subscribers since December.
Chief executive John Fellet says while it is too early to assess the full impact of the drop in numbers, the fewer subscriber losses in recent months shows a promising improvement.
“By global standards, 40 percent market penetration for a pay TV service is significant.
“We have managed to increased underlying profits and control costs while implementing a transformational strategy that ensures we keep delivering our great content to New Zealanders in ways that they want.”
Fellet is due to retire later this year after announcing his intention to do so earlier this year.
Sky has also reported costs are down $47 million for the year.
Beyond the numbers, the year ending June 2018 has been a big one for Sky with 2018 kicking off with the loss of the Rugby World Cup Rights to Spark and TVNZ.
Its subscriber count was also down from 816,135 in December 2016 to 778,776 subscribers in 2017 and facing competition from streaming services, earlier this year Sky dropped its entry-level price to $24.91 a month.
Earlier this month, NZ On Air’s released its latest media consumption report Where Are The Audiences 2018, showing total (net) SVOD reaches 62 percent of New Zealanders while TV (via pay TV platform) reaches 52 percent.
However, the broadcaster is not resting on its laurels. The past year has seen it update its Sky Go app in a move that connects customers with Sky Go on the go, with the addition of catch up TV, box sets and on-demand content on mobile and tablet. And most recently, it launched a dedicated eSport channel.
The past year has also seen it improve the viewing experience for customers with extended SKY TV Guide; movies restart feature; expanded movie rental library; Sports Highlights App personalised feeds; two new kids apps; and completion of SKY Box roll-out.
It’s also launched Neon TV-only and Fan Pass Mobile.