Sky Network Television has posted a 21 percent decline in annual profit as content costs increased, and revenue and subscriber numbers fell.
Profit slid to $116 million in the 12 months ended June 30, from $147.1m a year earlier, the Auckland-based company said on Tuesday.
Revenue dropped 3.7 percent to $893.5m while operating expenses slipped 0.3 percent to $601.2m. Some $2.1m of expenses related to the proposed merger with Vodafone, compared with $13.4m of costs a year earlier.
The merger with Vodafone was rejected by the competition watchdog Commerce Commission and Sky TV chief executive John Fellet says appealing the decision would have been "torturous and expensive".
"As time went by it became apparent that we could action many of the opportunities and synergies through commercial agreements without the escalating costs of a merger," he said.
"Some of those are in the market now and you will see further proof points of the closer working relationship in the foreseeable future."
The pay-TV operator faces increased rivalry from online streaming video services such as Netflix.
Its costs to secure programming rights increased 5.6 percent to $349.4m in the latest year, equating to 39.1 percent of revenue from 35.7 percent of revenue a year earlier.
Meanwhile, its subscriber numbers fell 3.3 percent to 824,782, with residential subscription revenue down 3.7 percent to $725.1m.
Increased subscribers for its subscription video on demand service Neon and sports service Fan Pass helped 'other subscription revenue' increase 3.7 percent to $82.2m.
Sky TV will pay a final dividend of 12.5 cents per share, taking its total annual dividend to 27.5 cents, down from 30 cents the year earlier.
Its shares last traded at $3.18, and have dropped 29 percent the past year.