23 Feb 2021

Sky TV profits up, revenues continue to fall

12:34 pm on 23 February 2021

Sky Television's half-year profit has more than tripled as it cut costs to counter falling revenue.

Sky headquarters in Mt Wellington.

Sky headquarters in Mt Wellington, Auckland. Photo: RNZ / Dan Cook

The pay-television operator posted a profit of $39.6 million compared with the previous year's $11.9m.

Sky's revenues continue to slide, down 7 percent to $360m as fewer consumers using its set-top box outstripped the lift in consumers using its streaming service.

Chief executive Sophie Moloney said there were signs that the loss of traditional set-top customers was slowing and finding a base.

"Our strong base of loyal customers who enjoy Sky via their Sky Box in the home, and our Sky Go app when they're on the move, is incredibly important to us. We will continue to focus our efforts to better understand the needs of these customers in order to deliver added value to them."

But satellite television revenues fell 9 percent, pointing to a lower spend on additional services by consumers. Sky plans to launch a new set-top box next year.

Sky said its operating expenses fell 18 percent to $242.8m, with permanent savings of $18m making up nearly half the savings.

Moloney told investors that while these financial results appeared positive, Sky "must do better" in order to stabilise its financials.

"That said, we are comparing against a period that we couldn't have imagined and an operating environment which included a lockdown and border restrictions."

"While there is still more to be done to stabilise, then grow revenue and to lock in further permanent savings to operations," she said.

She said Sky was going to achieve this by giving customs "easy and reliable access to the content they want to watch, in the ways that work for them".

Streaming was one which the company aimed to meet the demands of its base, with its platforms growing by 80 percent year-on-year and by 250 percent over the past four years.

"At the same time pricing and packaging initiatives, together with a strong sports offering has delivered a significant growth in Sky Sport Now.

"We are also excited to note that Neon continues to impress and growth is improving day by day," Moloney said.

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