Declining TV advertising revenues in the German-speaking region have contributed to revenues and profits plunging at media giant ProSiebenSat.1.
Quarterly results published on Thursday reveal that the group’s revenues declined from €1.04 billion ($1.14 billion) in 2022 to €868 million ($950 million) this year.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) declined by 49% to €79 million in the second quarter of 2023 (previous year: €155 million). For the half year, the group’s adjusted EBITDA was €133 million (previous year: €267 million). Consequently, adjusted net income plummeted to €4 million in the second quarter (previous year: €64 million) and for the half year, adjusted net income fell to minus €11 million (previous year: €101 million).
The financial decline comes in the wake of the group’s continuing realignment after it acquired streamer Joyn in 2022, which will result in the loss of 400 jobs.
Given favorable economic forecasts for the second half of 2023, the group’s outlook remains positive, with a marginal uptick in revenues projected but a decline in profits. The outlook projects full-year 2023 group revenues of €4.10 billion with a variance of plus/minus €150 million (previous year’s figure adjusted for currency and portfolio effects: €4.02 billion) and adjusted EBITDA of €600 million with a variance of plus/minus €50 million (previous year’s figure adjusted for currency and portfolio effects: €623 million). This expectation includes negative consolidation effects in the mid double-digit million Euro amount from the complete takeover of Joyn, the group said.
Group CEO Bert Habets said: “We are clearly aligning our organization and processes to our digital transformation. We are already seeing the first positive results here with our streaming platform Joyn: The launch in Austria was successful, advertising revenues on the platform are growing and video view time increased by 6% to 6.5 billion minutes watched in the second quarter. We are consistently pursuing this path, combined with our strong focus on costs and efficiency. With the organizational and strategic realignment now initiated, we are creating the basis for consistently implementing our growth strategy.”
Group CFO Martin Mildner added: “In the second half of the year, we expect our advertising business to recover in the course of a brighter economic development compared to the previous year, and thus to see significant catch-up effects in terms of revenues and earnings. In the third quarter, we currently expect the group’s adjusted EBITDA to develop stable year-on-year. At the same time, we focus on consistently implementing our cost program, in order to improve ProSiebenSat.1’s profitability in the long-term.”
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