- oOh!media (OML) had a strong day on the ASX after it flagged an ongoing recovery from hurdles faced during the COVID-19 crisis
- The outdoor advertising business said its revenue position improved over the second half of 2020 compared to the first half when the coronavirus first struck
- Nevertheless, oOh! still tabled a $35.7 million net loss for the year compared to the $13.7 million profit it made during 2019
- The loss was underpinned by a 34 per cent fall in revenue compared to the same time the year before
- Nevertheless, the third and fourth quarters of 2020 showed important revenue recovery, and oOh! expects this to continue over 2021
- The company says its network played a pivotal role in public messaging as people used billboards and public signs to stay informed of the most up-to-date coronavirus information
- Shares in oOh!media closed 14.48 per cent higher this afternoon at $1.70 per share
oOh!media (OML) had a strong day on the ASX after it flagged an ongoing recovery from hurdles faced during the COVID-19 crisis.
The outdoor advertising specialist still tabled a loss for the 2o20 calendar year, according to its latest half-yearly financial report, but the later quarters of the year certainly showed an improvement from the early days of the pandemic.
On top of this, the company said it increased its market share in Australia and New Zealand over the year to maintain its number one position.
Still, revenue for the full-year fell by 34 per cent to $426.5 million in 2020 compared to 2019’s $649.6 million.
Similarly, underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) more than halved to $63.2 million in 2020 compared to the $139 million the year before.
This translated to a net loss of $35.7 million for the year — a 361 per cent fall from the $13.7 million profit in 2019.
Of course, given OML’s focus on out-of-home advertising, lockdowns across the country over 2020 meant the business faced significant challenges.
As such, the fact that oOh!’s revenues were at 70 per cent over the fourth quarter of 2020 compared to the prior corresponding period compared is a promising sign of recovery. For reference, revenues were at 57 per cent over the third quarter of 2020 compared to the same time in 2019.
oOh!media CEO Cathy O’Connor said the company’s decisive response to COVID-19 lockdowns across Australia meant the business was able to survive the short-term challenges over 2020.
“The unprecedented restrictions on people movement and resulting audience decline impacted Out of Home more severely than other media segments,” Cathy said.
“In response, oOh! acted quickly and decisively to maintain and strengthen our competitive positive,” she said.
“That included a $167 million equity raising, refinancing of debt facilities, negotiation with property partners to deliver $63 million in net fixed rent savings, capital expenditure reduction of $49 million and operational cost savings of $16 million (excluding JobKeeper).”
Importantly, oOh! management said the long-term fundamentals out of home remain positive as the world continues to grapple with COVID-19 woes.
In fact, the company said its network played a pivotal role in public messaging for government bodies as people used billboards and public signs to stay informed of the most up-to-date coronavirus information.
Looking ahead
Given the way oOh! has been able to weather the COVID-19 storm so far, the company said it has continued to see revenue recovery as Australia keeps the worst of the virus at bay, with the business currently pacing at 80 per cent of revenue in the first quarter of 2021 compared to the first quarter of 2019.
Nevertheless, while the business is predicting ongoing recovery over 2021, it admitted that what lies ahead is still uncertain.
As such, while the company is expecting lower capital expenditure in 2021 compared to 2019, no other guidance has been given just yet.
Shares in OML closed 14.48 per cent higher this afternoon at $1.70 per share.