OPERATING PROFIT at TV3 fell by 80 per cent last year to just over €2 million as the business felt the full force of the recession on its bottom line.
The broadcaster’s advertising revenue fell to €52 million from €62 million in 2008 – a decline of just over 16 per cent.
TV3 paid a dividend to its parent, private equity group Doughty Hanson, of more than €6 million. It is thought that this sum was offset against the borrowings outstanding from Doughty Hanson’s purchase of TV3 for €260 million in 2006.
In an interview this week with The Irish Times, TV3 chief executive David McRedmond said the broadcaster’s advertising revenue had rebounded and indicated that profits for 2010 could be more than double last year’s surplus.
Mr McRedmond said advertising rose by 7 per cent in the first six months of this year. “We’d be delighted if we repeated that [in the second half] but it will be slightly lower than that. Five to 6 per cent growth would be our full-year projection,” he said.
With costs tightly managed at present and largely fixed, Mr McRedmond said the increase in revenues should nearly all flow through to its operating profit. This would indicate a rise in the surplus for this year of €2.6 to €3.1 million.
“The extra income largely falls to the bottom line,” he said.
Mr McRedmond said making a profit last year was an “important achievement” for the company given the “market crash” experienced by all media groups in Ireland in 2009.
“The single most important thing we did was to make a profit,” he said. “We’ve done that and 2010 will be considerably better for us because we have had advertising growth.”
In June, Doughty Hanson put an additional €15 million into TV3. Mr McRedmond said €9 million was put to pay down debt while €6 million is available as working capital.
TV3 trimmed its expenses by making 30 redundant, introducing pay cuts across the board and reducing other costs. But plans are in train to build a new high-definition studio at a new premises. Mr McRedmond said this was likely to involve an investment of about €3 million.
Mr McRedmond said 3e, the digital channel that TV3 acquired in 2008, is now operating in the black while its online service, TV3.ie, is also profitable.
“That’s very important for us,” he added.
TV3 yesterday launched its autumn schedule. New shows include an Irish version of Come Dine With Meand the Apprentice at Home. It is now the second most watched channel in Ireland behind RTÉ 1, having made significant audience share gains in the past couple of years.
