Television New Zealand has reported a strong increase in first half profit, driven up by an increase in advertising revenue.

The state-owned broadcaster made a net profit of $15.8 million in the six months to December, beating the year earlier by $5m or 47 percent.

“Strong ratings performance for our primetime daily news programmes and live sport enabled TVNZ to grow its share of audiences and advertising revenue for the half year,” chief executive Kevin Kenrick said.

Revenue rose 3 percent to $179m, with increased television and online advertising boosted by coverage of the Rugby World Cup.

“Close to 3 million New Zealanders tuned in to watch Rugby World Cup games on TVNZ 1 and DUKE,” he said, adding TVNZ had also secured rights to air the Tokyo 2020 Olympic Games in partnership with Sky TV, as well as NZ Cricket in association with Spark Sport.

He said those events would complement existing rights to the Tokyo 2020 Paralympic Games and America’s Cup.

Operational costs rose 3 percent to $152.8m.

Kenrick said the additional costs were associated with the transformation of the business.

He said TVNZ was accelerating the migration from international to local content, which would future proof the core business in the second half of the financial year.

The company was also investing in its OnDemand online service.

“TVNZ is keeping pace with global scale online streaming competitors, illustrated by Horizon Research recognising TVNZ OnDemand as New Zealand’s most used online content service during 2019, ahead of Netflix.”

He said the strong start to the year gave TVNZ increased confidence that it had the cash reserves to fund the transformation of the business, over the next next three years.

The increased investment was forecast to improve TVNZ’s second half and help it deliver on expectations.

However Kenrick warned the Covid-19 virus had potential to soften demand for advertising.

This article was originally published on RNZ and re-published with permission.

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