Broadcast revenue falls, but eMedia is upbeat

Advertising revenue in SA’s television sector dropped almost R500m in the year to endMarch as businesses and the consumers tighten their belts in the economic slowdown, according to eMedia.

Still, the media and entertainment group says that it is satisfied with its performance in 2022 despite the high cost of living and the energy crisis.

The eMedia group is worth R1.43bn, owns television and radio broadcasting businesses that include eNCA, OpenView and Yfm, as well as video on demand and production studios.

The owner of e.tv said on Thursday that it is proud to announce “a stable set of results” for the year to end-March.

As with other businesses in the country, energy uncertainty has proved to be a drag on its performance.

“Despite difficult trading conditions in the form of 282 days of load-shedding, which has had a direct impact on TV viewing, the group is satisfied with the financial performance achieved for the financial year.

“The available revenue for TV was affected so much so that it has resulted in a reduction of almost R500m in advertising revenue to the industry.”

Group revenue stood at R3.1bn, R20m less than the previous year, while earnings before interest, tax, depreciation and amortisation (Ebitda) of R667.2m closely matched the previous year’s R667.1m.

Profit was down 10.3% for the year at R381m from continuing operations.

This resulted in headline earnings per share, which strips out the effects of one-off financial events, falling 11% to 57.41c.

SHARE SLUMP

The profit figures “should be viewed in light of the continued load-shedding and the effect this has had on the advertising cake, foreign exchange rate and the effects of diesel usage on the business”, the company said.

eMedia shares, which are relatively illiquid, were unchanged at R3.25 on Friday, after slumping 9.72% on Thursday.

The group said it is encouraged by the reception of its online video streaming service eVOD, which is now more than a year old.

SA has in recent years seen growth in the number of streaming services that have entered the market, including US players such as Netflix. In the free-to-air market, in which eMedia predominantly plays, partnerships with telecom operators have become the business model of choice.

Competitor SABC now streams its radio and television content online through a platform that was developed in partnership with Telkom.

With original programming on eVOD the biggest pull for new users on the platform, the group plans to invest R100m more in local content.

“The platform is now more than 12 months old and has been well accepted in its target market,” said the company.

“The number of registered viewers to date has been very encouraging with the average daily minutes viewed in excess of 1,500,000,” said the company.

It said that the eOriginals offering with the Afrikaans Turkish telenovelas on the video streaming platform are the leading audience generators on eVOD, making the group bullish about investing further in local original content.

Rivals MultiChoice and Netflix have also been pouring much cash into local productions, with Netflix revealing earlier this year it has spent R2.3bn on such content since 2016.

The group has added 73 hours of original content to its slate.