Royal prank cost Australian radio network $2.9m

The Australian radio network behind a royal hoax call controversy in which a nurse was found hanged said on Tuesday the prank had cost it millions of dollars in revenue and expenses.

Southern Cross Media Group said the fake call by presenters from its Hot 30 programme to the hospital where the pregnant Duchess of Cambridge was being treated had resulted in a revenue hit of Aus$2.2 million and Aus$1.4 million in expenses in the six months to December 31, 2012.

It did not give the overall impact on net profit but said there was a 0.4 cent decline in earnings per share, which works out at Aus$2.8 million ($2.9 million).

"We have had one of the most difficult 12 months in our history," said chief executive Rhys Holleran.

Unsuspecting nurse Jacintha Saldanha put the prank call, in which the DJs pretended to be Queen Elizabeth and Prince Charles, through to Catherine's ward, resulting in details of her morning sickness condition being revealed on air.

The hoax made global headlines and Indian-born Saldanha was found hanged days later, triggering a major backlash against the radio network and the hosts which saw the station involved temporarily pull all advertising.

"The adjustment is the UK incident that occurred in December and reflects the three weeks of that incident," the company's chief financial officer Stephen Kelly told the Australian Broadcasting Corporation.

"The $2.2 million on the revenue line is really revenue that was cancelled from the schedule, not lost opportunity, and the $1.4 million in expenses is largely made up of legal costs and the amount that we have reserved for the family."

Southern Cross said any further financial impact from the incident was expected to be "immaterial" and full-year profit would come in between Aus$90-95 million.

Southern Cross reported a net profit of Aus$45.1 million in the six months to December 31, 2012 -- a 52 percent drop from the previous corresponding period's $94 million which had been boosted by a one-off item.

Underlying net profit was slightly above expectations at Aus$47.6 million.    

 

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