Seven West Media has reported a net loss of $744 million after booking a series of large non-cash write-downs.
The company booked impairment charges across its television, newspaper and magazine to the tune of $988.8 million.
Following the write-downs, Seven West’s intangible assets fell to $1.019 billion more than $500 million lower than the prior year.
Excluding the one-off impairments, Seven West reported a profit of $166.7 million, down 19.5% from the prior year.
Seven West shares were trading more than 2% lower a short time ago:
Earnings before interest and tax (EBIT) in the 2017 financial year were $261.4 million, down from $328.1 million in the prior year.
Hardest hit was the organisation’s print division, Pacific Magazines, where revenue fell more than $43 million, or -16.5% to $168 million. EBIT collapsed 61.5% from $9 million last year to $3 million.
The overall EBIT figure was at the lower end of Seven West’s forward guidance, after warning investors at last year’s results presentation the EBIT could fall up to 20% due to the onerous costs of contracts for AFL and the Olympics.
Net operating cash flows were $140.2 million, down from $201.6 million in the 2016 financial year.
In a letter to investors, Seven CEO Tim Warner said that the company remains an industry leader despite tough operating conditions.
“It has not been an easy 12 months for media businesses in Australia. Our financial results reflect that. But it has been 12 months in which we have built on our businesses’ market leadership, transformed how we do business and put in place the architecture that will see your company build and take advantage of a changing, dynamic landscape,” Worner wrote.
The Seven boss became headline news over the past after an inter-office relationship with former employee Amber Harrison turned into a bitter legal fight.
In July, the NSW Supreme Court ordered Harrison to pay Seven’s legal costs, estimated to be in excess of $250,000.
Harrison was taken to court by the network earlier this year for breaching a confidentiality agreement as part of a financial settlement in the wake of the affair with her married boss. She attempted to cross-claim against the network and after she refused a settlement with Seven offering to pay some of her legal costs, the company applied for the former staffer to pay all its legal expenses.
Today’s results saw Worner forego a short-term cash bonus of $500,000, but he still takes home $2.7 million in FY17.
Seven West chairman Kerry Stokes said that the company was still a market leader in a challenging environment.
“We continue to work on cutting costs and creating efficiencies, while investing in compelling content, including our long-standing associations with the Olympics, Australian Open Tennis and AFL,” Stokes said.
Stokes also referred to the company’s controversial legal battle with Harrison.
“Among the various issues faced during the year, we were obliged to take legal action to protect our business from the release of confidential company information and defend the reputations of our people,” Stokes said.
“As detailed in two separate successful NSW Supreme Court judgements, our group acted professionally and appropriately in the handling of this matter, which we trust is now closed.”