The oOh!Media Ltd (ASX: OML) share price has tipped slightly higher on Monday after the company released its 1H FY21 results.
At the time of writing, the OML share price is up 0.46% to $1.523.
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OML share price lifts on EBITDA surge
The recovering outdoor advertising market has kicked off an earnings recovery for the OML business.
Despite the OML share price edging lower on Monday, the company delivered a solid financial performance in the first half, with highlights including:
- Revenue rose 23% against the prior corresponding period (pcp) to $251.6 million.
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 209% to $33.3 million
- Reported net loss after tax of $9.3 million compared to a loss of $28.0 million in pcp
- OML achieved #1 market position for outdoor advertising in Australian and New Zealand markets.
What happened to OML in 1H FY21?
The OML share price has been bumpy for the past 9 months despite a strong recovery in its financial performance.
The company advised that revenues in key formats have rebounded strongly, with commute, road and retail advertising formats increasing 26%, 44% and 40% respectively compared to 1H 2020. These three verticals contributed to approximately 90% of group revenues in 1H FY21.
oOh!Media said that the road format continued to be the best performing category following on from 2020, surpassing 1H 2019 figures by 16%. Commute has continued to be impacted by a decline in rail passenger figures in key stations in the Sydney and Melbourne rail networks. While retail advertising delivered a solid improvement and approaching 1H19 revenue levels.
Other minor formats including fly and locate (office), continued to be impacted in the first half through lower audience members, with revenues falling 56% and 33% respectively.
Management commentary
oOh!Media CEO Cathy O'Conner commented on the first half result, saying:
We have seen strong audience growth post lockdowns which has led to a significant turnaround in revenue for the half, particularly in our key formats of Road, Retail and Street Furniture in Australia and New Zealand.
That has also been a function of our strong suburban and regional network where we continue to provide unrivaled reach and frequency for advertisers.
Looking over at the company's core Australia and New Zealand operations, O'Conner said that:
In Australia audience levels were consistent up to May 2021 before declining as a result of the Melbourne lockdown in June. Overall revenue has held consistently at 80% of 2019 levels with revenue in Road performing particularly strongly at 116% of the first half of 2019. New Zealand also performed at or slightly above 2019 levels.
As conditions have become more fluid during the pandemic, we are seeing advertisers capitalising on the flexibility of digital out of home (DOOH). With the largest quality digital network across the region, oOh! is well positioned to respond.
What's next for oOh!Media?
oOh!Media advised that revenue for Q3 was currently 38% higher than the pcp and 74% higher than Q3 2019.
The company said that forward visibility remained uncertain "given the ongoing effects of COVID-19 lockdowns and associated movement restrictions". However, OML expected that when the current lockdowns end, "there will be a strong recovery in audiences and associated revenues as has been the case previously".
Despite a largely positive outlook and first half-performance, the OML share price has slipped 6.5% year-to-date.
