The oOh!media Ltd (ASX: OML) share price is surging higher following the release of the media company's half-year (H120) results this morning.
At the time of writing, the oOh!media share price is up by 10.4% to 98 cents per share.
oOh!media's half-year results
For the half-year ended 30 June 2020, oOh!media delivered revenue of $205 million. This was down by 33% on the $304.9 million recorded in the prior period, driven by the economic fallout from the coronavirus pandemic.
The company reported a net loss after tax of $23 million, a staggering fall of 355%.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $10.8 million, down 81% on the prior period.
oOh!media's operating cash flow before financing increased for the first-half to $77.8 million, while underlying earnings per share fell 257% to 5.7 cents.
Cash on hand was $125.1 million at 30 June 2020, a 104% increase complemented by the company's recent capital raising in March. Further facilities of another $232 million is available, should oOh!media need to access these funds.
The company unsurprisingly decided against declaring an interim dividend in H120. The board will revisit this decision in future periods based on the prevailing market conditions.
COVID-19 impact
Difficult trading conditions have severely affected the company's revenue in the first half of 2020.
oOh!media reports that a reduction in passenger numbers and CBD audiences caused a decline across all its segments, most noticeably in the locate, fly and commute sectors.
Retail was mixed, with smaller grocery and weighted shopping centres performing better than major centres like Westfield.
In New Zealand, where oOh!media's presence is mostly represented by bus shelters, revenue accelerated to 80% of the prior period, after initial lockdown.
Although new waves of the virus could result in recurring restrictions complicating recovery plans, management reports it has achieved $80 million in cost savings to see the business through. This has come from savings in fixed rent expenses, operating expenditure, and capital expenditure reductions.
FY20 outlook
oOh!media advised that due to trading conditions remaining uncertain, no forecast for FY20 could be given.
The company reported that business is slowly starting to return to normal levels with Q3 building on the momentum from Q2, pacing at 60% of the prior period compared to 25% for the month of May.
oOh!media will continue to manage costs and liquidity to preserve business expenditure when growth cycles bounce back.
Commenting on oOh!media's H120 results, CEO Brendon Cook said:
We have maintained market share while strengthening our balance sheet, having responded quickly to the challenges presented by COVID-19. While revenue and profits predictably declined, our decisive early action to raise additional equity, reduce costs and capital expenditure and manage cash flows has reduced debt by 67 per cent and positioned the company well for the future.
About the oOh!media share price
oOh!media shares have recovered somewhat since their March lows of 55 cents, lifting 78% since then. However, the oOh!media share price is still trading 67% lower, year-to-date, and 60% down on this time last year.
