UPDATE: Ten Network 1st Half Profit Plunges 70%, Pins Hopes On New Shows

Australian television broadcaster Ten Network Holdings Ltd. (TEN.AU) posted a 70% plunge in first half net profit Thursday as weak ratings and a tough advertising market hit earnings.

Ten is banking on a raft of new and returning programs to turn around its ratings, which are currently languishing in third place at 24.7% behind Australia's two other commercial networks, leader Seven and second placed Nine.

The network is hoping its soon-to-return Master Chef program, one of Australia's most popular ever programs, will boost ratings, along with new episodes of popular U.S. sitcom Modern Family and new reality shows Don't Tell The Bride and The Shire.

Australia's television stations are battling for ratings to claim a share of a shrinking advertising market, which has been hit by poor retail conditions driven by cautious consumers reluctant to spend.

Chief Executive James Warburton, who replaced interim CEO Lachlan Murdoch, the eldest son of News Corp. (NWS) Chairman Rupert Murdoch in the role in January, said in a statement the company was focusing on ratings and revenue.

"We are making good progress on both fronts, but the full benefits of the turnaround will take some time to filter through to results," he said.

Lewis Fellowes, Patersons Securities state manager in Western Australia, told Dow Jones Newswires that Warburton was "hedging his bets" on new programs for Ten.

"Some of these programs are going to be hit or miss," Fellowes said, adding that while many viewers would likely tune in for an opening episode, the question remained whether they would continue watching.

Warburton told analysts that 2012 would be a difficult year for Ten given market conditions and the upcoming London Olympics which will be broadcast in Australia on the Nine Network.

Ten booked a net profit of 14.8 million Australian dollars (US$14.8 million) for the six months to Feb. 29, down from the previous corresponding period's A$49.5 million. Earnings before interest, tax, depreciation and amortization were A$63.9 million, down 40% on year, but in line with the company's guidance. It didn't declare a dividend.

Television EBITDA was A$56.8 million for the half year, down 40% on year from A$95 million, while EBITDA from its outdoor advertising division, Eye Corp., was A$7.1 million, down 36% on year from A$95 million.

Warburton told analysts that a change of strategy put in place in 2011 by Lachlan Murdoch, who is now the company's chairman, aimed at returning it to its youth-based, irreverent brand, had given the company a lower cost base. The company said it expects television costs for fiscal 2012 to be about 5% down on the previous year.

The company's strategic review of Eye Corp. is continuing and a "range of parties" have expressed an interest in acquiring the division, Warburton said. Analysts at Commonwealth Bank have valued Eye Corp around A$122 million.

-By Gavin Lower, Dow Jones Newswires; 61-3-9292-2095; gavin.lower@dowjones.com

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