NZME delivered a notable turnaround in the first half of 2026, doubling operating profit and cutting net debt by $13.9 million, led by strong audio revenue and digital expansion despite a challenging economic backdrop.
- Operating EBITDA up 11% to $26.5 million
- Statutory net profit after tax of $6.6 million versus prior loss
- Audio revenue grows 8%, digital audio up 16%
- Digital publishing EBITDA rises 11%, print declines slow
- Net debt reduced to $19.4 million, leverage ratio 0.4x EBITDA
Profit Recovery Anchored by Audio and Digital Momentum
NZME Limited (NZX:NZM) has reported a significant profit turnaround in the six months to 30 June 2026, posting a statutory net profit after tax of $6.6 million compared to a $0.4 million loss in the prior period. Operating EBITDA rose 11% to $26.5 million, driven primarily by a robust 8% increase in Audio revenue and a 16% jump in digital audio advertising. This performance comes despite ongoing economic headwinds and softer advertising demand in some sectors.
The company’s net debt shrank by $13.9 million to $19.4 million, pushing the leverage ratio down to a comfortable 0.4 times EBITDA, well below the target range of 0.5 to 1.0. Free cash flow improved by $5.1 million to $7.3 million, reflecting stronger earnings, lower interest expenses, and the absence of last year’s restructuring cash outflows.
Audio Division Leads with Sustained Growth and New Deals
Audio was the standout segment, continuing momentum from late 2025 with operating revenue climbing to $61.8 million. Radio advertising grew 8%, while digital audio advertising surged 16%, now representing over 10% of Audio revenue. Agency clients, who increased their spend by 15%, now account for 51% of audio revenue, up 3 percentage points year-on-year.
NZME secured a new 10-year commitment with iHeartRadio, underpinning its digital audio expansion. The launch of the iHeartCountry New Zealand brand and the introduction of commercials after a 12-month commercial-free period highlight the company’s strategic push in digital audio. Audience figures remain strong, with NZME radio brands reaching 1.84 million New Zealanders weekly and digital audio platforms attracting over 1 million monthly listeners.
Publishing Holds Steady Amid Digital Shift
Publishing revenue was stable at $90.5 million, with operating EBITDA steady at $15.3 million. Digital publishing EBITDA increased 11% to $6.3 million, offsetting a 7% decline in print publishing EBITDA. Digital subscription revenue rose 1% to $11.7 million, with subscriber numbers growing to 176,000, while print subscription revenue fell 4% amid a 9% volume decline, partially offset by yield gains.
The newly launched NZ Herald app, built in-house, has seen early positive engagement, with registered users growing since its June launch. The app features personalisation tools, integrated video content, and full OneRoof integration, positioning it as a key growth driver. Video content under the Herald NOW brand delivered over 37 million views across multiple platforms in the first half, including a recent expansion onto free-to-air television via Three.
OneRoof Navigates Market Challenges with Leadership Reset and App Growth
OneRoof’s revenue declined 2% to $14.1 million, weighed down by a 15% drop in print revenue amid a subdued Auckland property market. Digital revenue grew 4% to $9.9 million, supported by a 5% increase in digital classifieds. The new OneRoof app, launched in March, has driven a 54% increase in monthly app users, with app engagement proving more valuable than web traffic.
Management has rebuilt OneRoof’s leadership team and brought technology development in-house to accelerate product innovation and cost efficiency. Regional digital listing revenues grew 13%, while Auckland faced softer conversion rates despite a 3% growth in digital listing revenue. OneRoof remains the clear number two residential property platform in New Zealand, with ambitions to close the gap on market leader Trade Me Property.
Cost Discipline and Strategic Investments Position NZME for Future Growth
Operating expenses fell 1% to $140.5 million, aided by cost-saving initiatives implemented in 2025 that offset wage inflation and KiwiSaver changes. NZME is investing selectively in strategic roles across OneRoof, Herald NOW, and regional markets such as Christchurch.
Capital expenditure was $4.7 million, focused on digital product development including the NZ Herald and OneRoof apps. The company announced a $15 million investment to acquire Stuff’s Petone print plant equipment, aiming to replace aging Ellerslie facilities and achieve annual operating savings of around $7 million once operational. This move is expected to enhance print efficiency and expand third-party printing services in the North Island print plant investment.
Additional efficiency gains are targeted through AI and automation initiatives expected to deliver $7 million in annualised savings starting in 2026 and 2027. NZME is also negotiating reductions in Auckland office lease costs, pending final approvals.
Outlook: Modest Recovery Expected Amid Volatile Conditions
NZME acknowledges ongoing volatility from geopolitical tensions, including the Middle East conflict, and soft consumer confidence restraining discretionary spending. Advertising demand remains uneven across sectors. The company expects economic recovery momentum to improve into 2027, with a modest lift in demand anticipated for the second half of 2026.
NZME’s five-year content supply agreement with Google expires in December 2026. The company is actively working to renew or replace this agreement and to expand content licensing and AI monetisation opportunities globally.
Subject to stable trading conditions, NZME expects full-year 2026 operating EBITDA to exceed the $62.3 million achieved in 2025, continuing the positive trajectory set in the first half.
Bottom Line?
NZME’s strategy of doubling down on audio, digital subscriptions, and operational efficiencies appears to be paying off, but sustaining growth amid economic uncertainty and evolving media consumption habits will be the real test in the coming months.
Questions in the middle?
- Will NZME successfully renew its content supply agreement with Google and what terms might it secure?
- How will the print plant acquisition impact NZME's cost structure and competitive positioning in the medium term?
- Can OneRoof close the revenue gap with Trade Me Property as the Auckland market remains subdued?