- Recession seems to be the biggest fear gripping investors this year.
- Top Australian media houses have lost around AU$8 billion and 20-30% of their market valuation this year.
- Let’s see what’s ailing ASX media giants like Nine Entertainment (ASX:NEC), News Corporation (ASX:NWS), oOh!Media (ASX:OML) and others.
Recessionary fears and rising interest rates are casting a shade on investors since the beginning of this year. Reportedly, Australia’s biggest Media companies have lost around AU$8 billion on account of this. It seems like only Advertising marketing has worked for media houses. While media houses believe they can survive the recession, a few investment banks don’t think so. Meanwhile, top media companies listed on the ASX have lost 20-30% of their market valuation on a year-to-date basis.
In this backdrop, let us see what is ailing ASX media giants like Nine Entertainment (ASX:NEC), News Corporation (ASX:NWS), oOh!Media (ASX:OML), Seven West (ASX:SWM) and HT&E Limited (ASX:HT1).
Note- prices mentioned in the story and used for comparison are as of 4:00 PM AEST, 6 June 2022, on the ASX.
Nine Entertainment Co. Holdings Limited (ASX:NEC)
The holder of popular media brand Nine, Nine Entertainment Co. Holdings Limited’s share price is down about 28.81% on a year-to-date basis. Looking at its latest interim financial results released on the ASX, the year 2021 saw strong audience and revenue performance with a 15% growth in EBITDA. Digital revenue streams were expanding for the company. The momentum has continued into 2022, coupled with continuing strength in advertising markets and further growth in subscriptions. Even after posting strong results the company’s shares seemed to have failed to excite investors.
News Corporation (ASX:NWS)
Diversified media company News Corporation has lost around 23.96% on a year-to-date basis. While scrolling through News Corp’s financial results for March quarter, it can be noted that digital medium revenue has been a major contributor. Also, the company benefitted majorly from a rebound in the advertising market. However, as per a few analysts this gain is not good enough to bear the brunt of recession. Meanwhile on ASX, NWS share price is looming near its 3-month low.
oOh!Media Ltd (ASX:OML)
Next in-line is oOh!Media Ltd, a leading advertising media company having operations in Australia and New Zealand. The company provides its digital and physical assets as a medium for advertising mediums to create revenue.
As of date OML share price trades at its 3-month low price and on a YTD basis the share has lost 22.09% of its value. The company appears to have been strongly impacted by Covid restrictions. However, it is focusing now on digital mediums for revenue creation.
Seven West Media Limited (ASX:SWM)
Another popular Media sector company, Seven West Media Limited, is yet another ASX-listed stock trading at its 3-month low price. SWM shares have shed over 27.78% on a YTD basis. Steven West is yet another company that seems to be pegging strong on advertisement revenue for future growth.
In its latest trading update, Seven West Media Limited has stated that the TV market is still buoyant. It has also kept its FY22 Cost guidance unchanged. For seven west, strong trading conditions have underpinned an upgrade to its EBITDA range. However, despite being hopeful of the future Seven West shares appear as limp in attracting investors.
HT&E Limited (ASX:HT1)
Here, There & Everywhere, is another Australia-based media and entertainment company. It has operations in audio, radio and digital business across Australia.
The company has recently acquired a portfolio of assets from Grant Broadcasters and has expanded its network to a whole of 58 radio stations. It also reported strong revenue and earnings performance. HT&E is also reportedly highly hopeful of radio ad revenues in the coming days.
However, on ASX, HT1 share price has dipped to its three-month low level. On a YTD basis, the share price has sunk by 29.47%.
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