Australia's Seven West Media shares jump on cost cuts
MELBOURNE Nov 13 (Reuters) - Shares in Australia's Seven West Media Ltd, owner of the top-rated Seven Network, jumped as much as 21 percent on Tuesday after the group announced plans to pay down debt and reduce corporate expenses.
As advertising revenues across television and newspapers continue to slide, Seven West, which also owns the West Australian newspaper, also said first-half earnings will be sharply lower than a year earlier.
Chief Executive Don Voelte told the annual shareholders' meeting that earnings before interest and tax would be A$250 million for the first half of the financial year. That is down from A$309 million a year earlier.
"As for advertising, we are still seeing downward trajectories in a very thin market, but it does appear to be stabilising at these lower levels of decline," said Voelte.
But investors focused on cost-cutting measures including A$60 million in improved revenue and reduced expenses this fiscal year, compared with Seven West's previous budget.
Voelte, former chief executive of Woodside Petroleum, took over as head of Seven West in June.
The shares briefly traded up 21 percent, and were up 11.2 percent at A$1.29 at 0415 GMT.
Despite the jump, Seven West shares have fallen 61 percent this year, in line with third-ranked Ten Network which has lost 64 percent. Both have tapped shareholders for new funds to cut debt.
Australia's second-ranked network, Nine Entertainment, fell into the hands of its hedge fund lenders last month owing $3 billion in debt.