SKY posts huge loss thanks to 'goodwill' write-off

Pay TV broadcaster SKY has posted a $608 million net loss for the year to June and won't be paying shareholders a dividend in the second half of 2019.

It's written off $670 million in 'goodwill', assuming it won't be getting more subscribers to its satellite services anymore. 

"We live in an uncertain world and we have looked at a range of different scenarios and assumptions for the future," said CEO Martin Stewart.

"For the purposes of accounting we needed to pick a point estimate and we have selected one that no longer includes increases in hybrid and satellite subscribers, and we have taken a more conservative estimate of our future average revenues, reflecting our decisions around where we invest and how we price our future offers to customers.

"The board has also decided to not pay a dividend for the final six months of FY19, reflecting the investment focus of the business."

The company has also written off a $38 million relating to a planned decoder upgrade. Allowing for this and the goodwill write-off, SKY reported adjusted earnings of $97.4 million, which Stewart said was "better than the guidance we provided in February, despite the disrupted market that we are operating in.".

Subscriber numbers for SKY are reportedly up thanks to its streaming services, but these customers don't make as much money for the company as its traditional satellite service. Overall revenue per user, per month dropped from $77.73 to $74.84, NZME reported.

"Our business is poised to compete vigorously for, and to win key sports rights, to introduce new digital services and to invest in better experiences for our customers," said Stewart.

"We are asking our shareholders to support us in our strategy to invest to grow. In the last six months a significant amount of progress has been made, and it's only the beginning."

He told Stuff getting the share value back up was his main strategy, as this would deliver better value to shareholders than paying a dividend, at this stage.