Seven West Media has revealed almost $1 billion in asset write-downs and a near $750 million loss for the 2016-17 financial year — the second huge loss triggered by asset write-downs in three years.

Seven reported a statutory net loss of $744 million for the year ended 24 June 2017. This compares to the previous year statutory net profit of $184.3 million. The Olympics only roll around every four years.

The latest loss and write-downs take the total value of the cuts to more than $3 billion as the company’s board and biggest shareholders adjust to a media landscape that has changed significantly since Seven West Media was formed in 2011 in a merger valued at $4.1 billion.

The write-down has been driven by the collapse in the company’s share prices (which drove the slump in Ten’s balance sheet values for years). Seven’s most recent high was $1.2150 a share in June of last year. Since then they have plunged 34% to a low of 65 cents, and closed yesterday at 79 cents (they fell 3% in a market that rose overall). 

At yesterday’s close the company’s value of $1.19 billion and the annual report shows that net assets have been slashed to just $418 million from $1.252 billion a year ago. There is now a $700 million premium in the value of the company compared to its book value — either the share price will fall further to eliminate that or they must muster corporate activity to justify that optimism.

The Seven West Media board took an axe to the value of its key media assets, slashing their value by nearly $989 million, most of which was taken in the June half year after a smaller, $83 million group of write-downs was revealed in February for the six months to December. At the same time the groups operating and underlying profits fell by nearly 20% — as the company forecast earlier in the year with revenues dropping by nearly 4%.

It’s the second time in three years that red ink has stained the Seven balance sheet. Back in 2014-15 the company reported a loss of $1.89 billion thanks to asset write-downs of $2.07 billion — which were also in the value of the TV, newspaper and magazine assets.

The write down at the start of the year was mostly a cut in the value of the Yahoo7 joint venture of around $75 million. That cut was made after pressure from the corporate regulator, but today there was no sign of that as the board whacked the value of the TV, magazine and newspapers. Seven reported $435 million was cut from the value of the company’s TV assets, $61.6 million from newspapers and $61 million from Pacific Magazines. The results state $139 million was cut from the value of “onerous contracts”, $179.5 million was cut from the value of “equity accounted investees” (businesses Seven has invested in, such as Yahoo7) and $97 million from the value of fixed assets. 

The frank results support the cuts. The TV business saw a 1.7% rise in total revenues to $1.281 billion, with TV ad revenues up 0.8% to $1.062 billion in a market where total ad spend was off almost 4%. And yet earnings before interest and tax (EBIT) in the TV division dropped 14.4% to just on $250 million. Pacific Magazines was a disaster zone: revenues plunged 28% to just $40 million and EBIT slid more than 60% to just $3.5 million. Another year like that and the magazine business could die. And for newspapers in Perth revenues slumped 4.8% to $217 million. That result includes The Sunday Times in Perth, which became a Seven asset last November.

And there is no improvement in sight with the company forecasting a 5% fall in group EBIT for the year to June 2018. While that is not as negative as the forecast last year of a 15% to 20% fall, it indicates that legacy media in this country remains under rising pressure to maintain revenues and earnings.

What difficult decisions they have to make in the future remains to be seen.