Southern Cross Media (ASX:SXL) shares have fallen sharply on the back of the company’s latest trading update.
SCA’s first quarter revenues were 8.5 per cent lower than the year earlier period, with declines in both audio and television segments.
First quarter operating costs were $1 million below the prior comparable period. This includes one-off restructuring costs of $1.5 million related to the outsourcing of transmission services.
Earnings (EBITDA) for the first half is expected to be in the range of $60 million to $68 million.
Depreciation for the first half is expected to be about $4 million lower compared to same time last year, and full year capex will be $5 million to $7 million lower than in FY19. Southern Cross says these reductions are a direct result of the decisions to outsource transmission and television playout services.
Sothern Cross says cost discipline remains a core focus, and a series of actions have been taken to mitigate full year costs in response to adverse market conditions. The majority of these savings will be realised in the second half. Meanwhile, advertising markets remain short and volatile and SCA will continue to focus on maximising its market share while maintaining strict cost control across all divisions.
Shares in Southern Cross (ASX:SXL) trading 19.9 per cent lower at 93 cents.