U.K. network ITV has posted a drop in its interim earnings, citing a “challenging” advertising market and planned investment in its video on-demand service ITVX.
In its half year financial results, released on Thursday, the broadcaster showed that total external revenues had fallen 2 percent to £1.63 billion ($2.11 billion).
Earnings before interest, taxes, and amortization (EBITA) were £133 million, a plunge from £295 million during the same period last year. Statutory profit before tax hit £45 million, a sharp drop from the £219 million it declared in its 2022 half yearly results.
Media and entertainment revenue fell 9 percent to £964 million, with total advertising revenue down 11 percent. Within this, digital advertising revenue was up 24 percent to £179 million.
At ITV’s production arm ITV Studios, revenue was up by 8 percent to £1 billion, driven by the U.K. High-end scripted output was down to 109 hours from 133 hours in the first half of 2022, something ITV said was due to phasing of deliveries. Meanwhile, revenue per hour of scripted content increased year-on-year, and ITV claimed it full-year of high-end scripted hours were expected to exceed 2022.
“The continued momentum behind ITV’s strategic transformation delivered strong growth in Studios and digital revenues in the first half of the year, largely offsetting the expected weakness in the U.K. advertising market – with total revenue declining just 1 percent in H1, even in a very tough advertising market,” said Carolyn McCall, ITV chief executive. “We remain on track to achieve all our KPI targets which gives us confidence we will deliver at least £750 million of digital revenue by 2026. As we said at the full year results in March, 2023 is the year of peak net investment in our streaming business and we expect profit to grow from here.”