- Entertainment and media player Sky Network Television (SKT) has bumped up its earnings guidance for the 2021 financial year
- The company upped its revenue and net profit forecasts from November 2020 estimates, but capital expenditure remains unchanged
- The new guidance is attributed in part to the sale of its Outside Broadcast assets, which could save the company $50 million over the next five years
- Sky noted these figures are subject to there being no adverse changes in current economic or operating conditions as a result of COVID-19
- Investors appear to have responded favourably to the update, with SKT shares up 10.3 per cent trading at 16 cents each
Entertainment and media player Sky Network Television (SKT) has bumped up its earnings guidance for the 2021 financial year.
The figures
The company has upped its anticipated revenue for FY21 to a ballpark figure of between $695 million and $715 million, from a $680 million to $710 million estimate announced in November 2020.
Earnings before interest, tax, depreciation and amortisation (EBITDA) have. been adjusted to $170 million to $182.5 million, from previous estimates of $140 million to $155 million.
Capital expenditure is set to remain the same at $45 million to $55 million, while net profit after tax (NPAT) has gone from a $20 million to $30 million estimate to a $37.5 million to $45 million estimate.
The company noted that these figures are subject to there being no adverse changes in current economic or operating conditions as a result of COVID-19.
Increased expectations
According to Sky the increased revenue and profit expectations can be owed to further one-off cost savings, a second half management re-forecast and continued
improvement in satellite and streaming revenues.
The revised guidance also includes the proposed sale of its Outside Broadcast assets to NEP New Zealand Limited, which the company says could save them a capital investment of approximately $50 million over five years should it receive regulatory approval.
A timeframe on the sale has not been given.
Sky also flagged forecasted an increase programming rights costs from January 1 2021 and start-up costs associated with the launch of its Sky Broadband, could see EBITDA and NPAT weighted towards the first half of FY21.
Sky Network Television Chief Executive Sophie Moloney said keeping operating costs low was a focus.
“Reducing Sky’s ongoing operating costs remains in sharp focus while we continue to deliver the content that our customers value in ways that work for them,” said Sky chief executive, Sophie Moloney.
Investors appear to have responded favourably to the update, with SKT shares up 10.3 per cent trading at 16 cents each at 12:36 pm AEDT.