NZ's Sky TV says high-def service to dent earnings

WELLINGTON, June 11 (Reuters) - New Zealand pay television operator Sky Network Television Ltd (SKT.NZ) said on Wednesday it expected the introduction of high definition broadcasts to cost to NZ$22 million ($16.5 million) in earnings over the next two years.

In figures supplied to an investor briefing it said it was targeting installation of 80,000 set top boxes providing the new service in the year to June 2009, at a capital spend of NZ$40 million.

It estimated this would result in a reduction in earnings before interest and tax (EBIT) of NZ$10 million in 2009, and NZ$12 million in the following year.

It forecast earnings before interest, tax, depreciation and amortisation (EBITDA) to rise NZ$9 million and NZ$21 million in the respective years.

Shares in Sky TV, a top-10 stock nearly half-owned by Rupert Murdoch's News Corp. NWS.N, last traded down four cents or 0.9 percent at NZ4.60. ($1=NZ$1.33)