Tough market conditions and on-air controversies have contributed to Southern Cross Austereo (SCA) posting a 52% drop in profits for the first half of the financial year. Boss Rhys Holleran dubbed 2012 "one of the most difficult" years in its history but has remained positive, talking up 2013 and pinning his hopes on a long federal election campaign.
SCA's net profits after tax (NPAT) from the first half of the financial year came in at $45.1 million, a major decline (51.9%) from the first half last year when it posted $94 million.
Revenue also took a hit, decreasing by 8.9% to $32.5 million. The network cited "on-air incidents", led by the 2DayFM royal prank hoax which was linked to the death of British nurse Jacintha Saldanha, as significant factors. In addition to causing the network to temporarily pull all its advertising and permanently suspend all prank calls, the controversy saw SCA donate all its profits from advertising to the family of Saldihana in mid-December.
It also cited the effect of Ten's dwindling audiences and Metro Radio's share loss as contributing factors.
However, chief executive Rhys Holleran talked up prospects for 2013. "We are well positioned to take advantage of any upturn in advertising markets," he said in a statement. "Sentiment is on the improve in advertising circles and our staff are fine tuned and ready to respond."
SCA is expecting its full year NPAT figure to be between $90 - $95 million, hoping "a long federal election campaign may help revenue opportunities".
It is also hoping its investment key talents, including advertiser and consumer favourites Hamish Blake and Andy Lee, will swell the network's success. The irreverent duo returned to 2DayFM this year after a stint away from radio, in which they focused on a variety of television programs. They are currently on air five days a week with their morning format, The Business Brunch, which plays after Kyle and Jackie O's Breakfast show.
Previous years have seen 2DayFM shock jock Kyle Sandilands slapped with licensing conditions after controversial incidents, including when he referred to a News Limited journalist as a "fat slag".
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