ARN Media’s 2023 half year results are out with total Group and radio revenue down but podcast and iHeartRadio consumption increases alongside digital audio advertising revenue.

OVERVIEW:

• ARN held the #1 network position for metro AM/FM stations in Australia for four of the last five surveys.
• ARN monthly average podcast listening increased 23% to 6.6 million people based on Triton Australia Podcast Ranker Jan-Jun 2023 average vs the Jan-Dec 2022 average.
• Radio advertising revenues reduction was attributed to reduced consumer spending, the slowing of the economy and Government spend significantly down.
• On a statutory basis, ARN Group revenues from ordinary activities of $165.9 million decreased by $6.1 million on the prior period.
• Digital audio advertising revenues reached $8.8 million, up 37%, targeting a cashflow break even run rate by end 2024.
• iHeartRadio continued to grow, up 12%, with more than 2.5 million registrations.
• There was a net debt of $52.4 million and leverage of 0.8 times EBITDA2.
• Proceeds totaling $66.3 million were received from the Soprano sale.
• The acquired 14.8% interest in SCA, purchased for $38.3 million was described as a long-term strategic investment in an undervalued sector with ~10% yield.
• A half year fully franked dividend of 3.5 cps was declared; ~10% effective yield
• H2 digital audio revenues are pacing to +25% year on year.

ARN Media Chairman, Hamish McLennan said of the results:

“ARN has delivered a good result in a highly competitive market against a backdrop of reduced consumer spend, a slowing economy and a reduction in government spend, which has impacted revenues.

The strength of audio is undeniable as both radio and podcast listening continues to grow. We continue to have the number one metropolitan network in Australia with our newly integrated regional network performing strongly as advertisers increasingly pay attention to audio in regional Australia. Importantly, the final components of the regional integration with our metropolitan network are on-track for completion in 2023. “We are strong believers in the future of the sector reflecting our decision in June to acquire a 14.8% interest in Southern Cross Austereo for $38.3 million – a business we know well in a sector that is undervalued, positioning ourselves for future value creation.”

ARN’s Q3 radio revenues are thought to be pacing in line with prior comparative periods suggests a similar trajectory into the final quarter.