Packer PBL stock dips despite profit

Elections, Asian crisis affecting ad market, Falloon sez

SYDNEY — Shares in Kerry Packer’s Publishing & Broadcasting Ltd. dipped by 8¢ to A$6.24 ($3.74) Wednesday despite the company’s announcement of a 162% jump in after-tax profits to $285.8 million for the year ending June 30.

The hike in earnings was due mostly to abnormal gains from the revaluation of PBL’s Nine Network licenses and the sale of its 50% stake in sports cabler Sky Channel.

The Nine web posted a 10.5% increase in gross advertising revenues for the year (a 41% market share), but PBL chief exec Nick Falloon warned the advertising market had tightened since July due to uncertainty surrounding the Oct. 3 federal election and the impact of the Asian crisis.

Absorbing the blow

Falloon said the abnormal gains were partly offset by provisions for downgrading the value of its investments in Asia, pay TV and Village Nine Leisure (the troubled operators of amusement centers).

He indicated the company is still considering whether to exercise its option — which expires at the end of October — to equalize its interest in cabler Foxtel with News Limited.

If taken up, that would see PBL emerge with a 25% holding.

PBL did not receive a dividend from its stake in Arnon Milchan’s Regency Enterprises, compared with a $1.1 million return in the prior year.

The group’s sales improved by just 5% to $696.6 million. Falloon said PBL’s co-venture with Microsoft in the online service ninemsn, launched last March, offers tremendous growth opportunities.

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