oOh!media plummets over 40 per cent at ASX open

• ASX 200 advertisers oOh!media saw a 42.57 per cent slashing to its share pricing at market open today, after the company announced a revision to its 2019 financial year earnings guidance
• Set to release full results in ten days from now, the company’s earnings have been preemptively slashed by 17 per cent to sit between $125 million to $135 million
• The company shifted blame to general economic uncertainty and reduced media spending that affected the third and fourth quarter earnings
• The swift decline in media booking was particularly rough on the company, as it claims the second half of a financial year to be its most important for earnings

ASX 200 advertising giant oOh!media will be plastered everywhere today, after the company’s shares plummeted 42.57 per cent at market open.

Over the course of the trading day, the company’s shares have managed to slightly climb back to a general 25.5 per cent reduction in pricing — trading at $3.01 apiece.

So what happened?

A day after a recession scare trading period that yanked tens of billions of dollars from the ASX, oOh!media released a trading update and revised guidance for the 2019 financial year’s performance.

Citing “general economic uncertainty” and reduced media spending, the company has slashed expected earnings by 17 per cent — a reduction of roughly $27 million.

This reduction has downgraded expected earnings to sit between $125 million and $135 million — as opposed to the previously expected $152 million and $162 million.

While the outdoor advertisers had no issue tracking the first half of the period’s earning guidance, it cited significantly less revenue coming through in the second half.

Advertising bookings for the company in the third quarter of 2019’s financial year showed a swift decline on the year and raised alarms.

Not only is the decreased revenue a disappointment, the company also stated it usually relies heavily on the third and fourth quarter earnings to boost the year’s performance.

oOh!media has recently announced a new division of business advertising specifically at bus stops and the like, titled Commute by oOh!

Today, the company stated the integration of the new division will remain on track, with an expected run-rate of $16 million in costs.

However, the company says it will expect a decrease in capital expenditure from the 2019 financial year round up — somewhere between $55 million and $70 million.

No direct quote was given from oOh!media’s management today.

The company is to release its full financial results in ten days from now, on August 26.