A poor advertising market has hit the bottom line of Television Broadcasts (TVB), with the dominant free-to-air TV operator reporting a 34.51 per cent year-on-year fall in interim profit.
For the six months ended June 30, TVB reported a profit of HK$161.86 million, largely in line with estimates. Turnover fell 10.14 per cent to HK$1.38 billion.
Operating profit of TVB's most profitable segment - terrestrial TV broadcasting - fell 57.64 per cent to HK$152.12 million.
'The overall performance of our business and industry is closely correlated to the macro economy, and regrettably, as everyone is well aware, Hong Kong's economic situation worsened considerably in the first half of 2002 compared with the same period the previous year,' TVB said.
'[Gross domestic product] was down substantially year on year, unemployment was much worse than in the first half of 2001 and retail sales were off significantly - all indications of an economic environment calculated to test the mettle of all advertising media including television.'
Despite reporting a painful first half, TVB said it could make up some ground in the second half due to a lower base comparison and the seasonality factor.
'Given the tragic events and attendant economic weakness of second-half 2001, our year-on-year comparison in the second half of 2002 will be easier,' it said, adding that advertisers traditionally weighted sales in the second half heavier than the first.