The Sky Network Television Limited (ASX: SKT) share price is trading lower today after the company announced its half-yearly report.
At the time of writing, its shares are down by 5.88% at 16 cents.
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What's driving the Sky Network share price today?
In today's release, the company reported revenue for the first half of FY21 at $356.9 million. This was 7% lower than the prior corresponding period (pcp).
Management put that down to the impact of the COVID-19 pandemic, despite Sky Network experiencing strong growth in streaming revenue and the gradual recovery in advertising.
Despite the slide in revenue, the company increased its earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA rose 30% from $89.7 to $116 million.
Furthermore, net profit after tax was up 234%, climbing to $39.6 million. The company said permanent cost savings from various initiatives contributed to the strong EBITDA and NPAT results.
This was also reflected in the company's operating expenses, which fell to $242.8 million, 18% lower than the pcp. Notably, the company managed to cut $18 million in permanent savings.
Moreover, Sky Network has grown cash balances on hand to $123m following its capital raise last year. Along with undrawn debt facilities, this enables it to repay the $100m of bonds that mature in March 2021 and provides significant headroom going forward.
Management comments
Sky Network chair Philip Bowman welcomed the report, saying:
We are encouraged with the solid results achieved in the first half. Sky has a unique role to play as the content aggregator which can deliver to all of New Zealand, and [chief executive] Sophie Moloney and her team have a clear focus to maintain performance in the coming months and years.
Outlook
Looking ahead, the company said it would continue to focus on revenue stabilisation. Sky Network expects organic growth in Neon and Sky Sport Now. With an ongoing recovery in advertising and commercial revenues during the remainder of FY21.
The company also stated it would undertake additional investment in the second half of FY21, primarily for its Sky broadband service ahead of projected revenue growth.
Sky Network also reaffirmed its guidance for FY21 with revenue from $695 to $715 million. EBITDA will increase to between $170 and $182.5 million.
