Seven’s non-media businesses perform strongly
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Seven Group Holdings has reported a 40 per cent surge in full-year underlying earnings but a $291 million write-down in the value of its media business, which hit its bottom line.
The diversified company’s earnings before interest and tax was $695 million for the 2019 financial year, but its profit fell 47 per cent to $219.2 million.
This was primarily due to a $259 million write-down in the value of its television, magazine and newspaper investments.
Caterpillar dealer subsidiary WesTrac recorded a 41 per cent increase in earnings before interest and tax to $285 million amid strong activity in Western Australia's resources sector.
Equipment rental business Coates Hire also benefited from an uptick in resources activity, experiencing a 42 per cent growth in underlying EBIT to $183 million.
Seven said the take-up of autonomous mining technology would lead to long-term growth among the two businesses.
Oil and gas company Beach Energy, which counts Seven as its largest shareholder, recorded an increase in underlying EBIT by 118 per cent to $156.6 million.
Managing director Ryan Stokes said the outlook for most of its overall business was positive.
“Our industrials businesses are well placed to benefit from the mining production cycle and the continued investment in infrastructure,” he said.
“Beach Energy is led by a highly capable management team operating a quality set of assets and exploration opportunities.”
However, in his outlook statement, Mr Stokes made no mention of Seven’s struggling media business.
Yesterday, Seven West Media, which Seven Group has a 41 per cent stake in, reported a $444.5 million full-year loss and flagged another fall in earnings for the year ahead.
Shares in Seven Group were up 2.43 per cent to $17.08 at 3.45pm AEST.