U.K. broadcaster ITV’s total external revenues declined 2% to £1.63 billion ($2.11 billion), according to half year financial results released on Thursday.
The decline, which is due to a challenging advertising market, was offset by growth in ITV Studios and digital revenues.
Earnings before interest, taxes, and amortization (EBITA) plunged to £133 million from £295 million during the same period last year. Statutory profit before tax was £45 million, a steep drop from the £219 million declared during the 2022 half yearly results.
Group adjusted EBITA was down 52% at £152 million, which the “Love Island” broadcaster said was “as expected” and reflected the challenging advertising market and the planned investment in streamer ITVX.
Media and entertainment revenue was down 9% at £964 million, with total advertising revenue (TAR) down 11%. Within this, digital advertising revenue was up 24% to £179 million. Media and entertainment adjusted EBITA was £23 million, down from £194 million in 2022.
Total ITV Studios revenue was up 8% to £1 billion, driven by the U.K., with an adjusted EBITA margin of 13%. The unit’s high-end scripted output was down to 109 hours from 133 hours in the same period in 2022, which ITV said was due to phasing of deliveries. On the other hand, revenue per hour of scripted content increased year-on-year in the first half. Over the full year, high-end scripted hours are expected to exceed 2022, based on the current delivery plan.
Nine formats were sold in three or more countries, including “The Voice,” “Love Island,” “My Mum, Your Dad” and “Come Dine With Me.” The proportion of total ITV Studios revenue from streaming platforms grew from 19% to 27%, from commissions or development deals with most of the major streamers. The unit also has a high level of committed revenues for the full year of 89% (2022: 90%).
ITVX continued to grow with monthly active users up 29% to 12.5 million and total streaming hours increasing 33% to 737 million hours, driving rising digital revenues. BritBox International subscribers grew 7% to 3.2 million.
“The continued momentum behind ITV’s strategic transformation delivered strong growth in Studios and digital revenues in the first half of the year, largely offsetting the expected weakness in the U.K. advertising market – with total revenue declining just 1% in H1, even in a very tough advertising market,” Carolyn McCall, ITV chief executive, said. “We remain on track to achieve all our KPI targets which gives us confidence we will deliver at least £750 million of digital revenue by 2026. As we said at the full year results in March, 2023 is the year of peak net investment in our streaming business and we expect profit to grow from here.”