News Corp profits almost double as subscriptions drive post-pandemic recovery
News Corp, the publishing company controlled by Rupert Murdoch, said profits almost doubled in the year to June as growth in digital advertising and subscriptions helped its news operations recover from losses incurred during the pandemic.
The US-listed company, which publishes newspapers including The Wall Street Journal, The Australian and The Times, reported an 11 per cent increase in revenue for the year to $10.4bn and pre-tax profit rose to $812mn compared with $450mn the previous year.
“The News Media segment was the single largest contributor to the enhanced profit picture this fiscal year with profitability expanding to $217mn from $52mn, bolstered by growth in digital advertising revenues and record digital subscriber numbers,” News Corp chief executive Robert Thomson said, adding that said the company had “set significant records”.
Susan Panuccio, chief financial officer, said inflation and limited advertising visibility would result in “necessary action” on costs in the new financial year.
The strong performance in fiscal 2022 was a marked contrast to 2020, when the company booked a $1bn loss in three months to March due to a collapse in advertising revenue and pay-television subscriptions. News Corp shut the print editions of 100 Australian newspaper titles as a result, dealing a hammer blow to the local media industry.
The strong performance of the media business, with revenue up 10 per cent year on year, was driven by the company’s Australian and UK operations, which include the Wireless Group radio business.
Circulation and subscription revenue increased 8 per cent, or $83mn, while advertising revenue rebounded 14 per cent driven by both digital sales and a recovery of print advertising in the UK. Earnings before interest, taxation, depreciation and amortisation at the division grew to $165mn offset by currency fluctuations and $20mn of costs linked to its TalkTV launch in the UK and other digital investments.
Overall profit at the company, which also includes real estate websites and book publisher HarperCollins, was also hit by a $20mn litigation charge. The company did not disclose what the case related to.
Darren Leung, an analyst with Macquarie, said that the results were stronger than expected, driven by cost control and solid subscriber growth.
The company’s Kayo sports streaming service added 142,000 in the fourth quarter, boosted by the timing of the Australian Rules football season. The growth helped offset a more static performance at the broader Foxtel pay-TV unit.