The oOh!Media Ltd (ASX: OML) share price is struggling today. At the time of writing, shares in the outdoor advertising company are trading more than 6% lower for the day. Shares in oOh!Media were down nearly 7% earlier, after hitting an intra-day low of $1.70.
Why is the oOh!Media share price dropping?
Since oOh!Media has not released any price-sensitive news, there are a few catalysts that could be causing the company’s share price to drop.
Given that the company specialises in ‘out of home’ advertising, COVID-19 lockdowns could explain the dropping share price. ‘Out of home’ advertising refers to marketing in trains stations, aeroplanes, shopping centres and accounts for approximately 75% of Group revenue.
oOh!Media operates in Australia and New Zealand, boasting an extensive network of more than 37,000 digital and static advertising locations. These locations include road, rail, airports, retail centres, universities and office buildings. With people staying home during the lockdown period, the subsector could be a potential casualty.
How has Ooh Media performed?
Earlier this year, oOh!Media revealed the devastation that the pandemic had caused in its financial results for 2020.
For the year ending 31 December, the outdoor advertising company highlighted a 34% decline in revenue of $426.5 million. In addition, oOh!Media reported a net loss after tax excluding acquisition-related amortisation of $8 million. Underlying EBITDA also declined by 55% to $63.2 million, reflecting the decline in the company’s revenue.
The company also provided a snapshot of its performance in 2021 at its recent annual general meeting. For the first quarter FY21, oOh!Media saw total revenue in Australia decline by 22% compared to the prior corresponding quarter. This decline compares to an overall 24% decline in the broader Out of Home sector as measured by the Outdoor Media Association.
In New Zealand, first quarter FY21 revenue declined by 6% compared to an overall 8% decline for the Out of Home sector.
Snapshot of the oOh!Media share price
The tough trading environment was reflected in the oOh!Media share price which hit a 52-week low of 70.5 cents last year.
Following a strong recovery, shares in the out of home advertising company have remained flat in 2021. Despite the recovery, the oOh!Media share price is currently trading modestly lower from its 52-week high of $1.95.